SGX's Q3 profits hit 10-year high on strong derivatives revenue

SGX's Q3 profits hit 10-year high on strong derivatives revenue

Singapore Exchange on Friday (Apr 20) reported a 21 per cent rise in net profit for the third quarter ending Mar 31, boosting profit to the highest in 10 years. 

SINGAPORE: Singapore Exchange on Friday (Apr 20) reported a 21 per cent rise in net profit for the third quarter ending Mar 31, boosting profit to the highest in 10 years. 

Total third-quarter net profit came in at S$100.5 million compared to S$83.1 million a year ago, while revenue rose 10 per cent to S$222 million.

This was on the back of strong a 20 per cent increase in derivatives revenue to S$90.5 million - or 41 per cent of total revenue. 

Meanwhile, revenue from equities and fixed income increased 5 per cent to S$107.9 million, accounting for 49 per cent of the bourse's total revenue. 

Listing revenue grew 10 per cent on the back of a higher number of new bond listings, while revenue from securities trading increased 12 per cent. 

However, revenue from post trade services dropped 11 per cent to S$25.6 million due to a change in the mix of settlement activities, SGX said. 

Earnings per share for the quarter was at 9.4 cents, and the SGX board declared an interim dividend of 5 cents per share, payable on May 8.

SGX CEO Loh Boon Chye said in a news release that market activity is expected to improve as investors seek avenues to manage their portfolio risk. 

"We will continue to build on our multi-asset offering and increase our servicing and marketing efforts across our domestic and international client base," he added. "We will also strengthen our global network through strategic partnerships and alliances.”

A Reuters report said that market focus is now on how SGX can cope with a move by India's three main bourses to stop licensing their indexes and securities to foreign exchanges in August. Worried by the potential decline in business, analysts have cut SGX's earnings estimates for the next few years.

SGX has said it will list launch successor products to its flagship Indian equity derivative products in June, ahead of the expiry of its licence agreement with the National Stock Exchange of India in August.

A global listing hub for real estate investment trusts and business trusts, SGX is also launching dual-class shares this year, a plan that fits with Singapore's moves to reinvent itself as a fintech and new technology hub.

This comes as exchanges are stepping up efforts to attract listings, with Hong Kong Exchanges and Clearing set to announce dual-class shares and biotech listing rules next week. 

Source: CNA/Reuters/mz

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