Singapore Exchange 03 (Feb 11 - Dec 24)

[winston]

not vested

SGX: In talks with Baltic Exchange

According to Reuters reports, The Baltic Exchange, a hub for global shipping market, has held talks with several potential buyers, including Singapore Exchange Limited (SGX).

Meanwhile, the SGX has released an official statement that it has submitted a non-binding bid for the acquisition of The Baltic Exchange, but stressed that talks are still at the preliminary stage.

This deal could complement SGX’s current Derivatives business, especially freight derivatives.

As discussions are still in the early stages, we will not be revising our earnings projections.

Since our last report in Jan 2016, the stock has gained as much as 10% to a recent high of S$7.30 last week before easing off to S$7.01 yesterday, still up some 5.4%.

Our fair value estimate for the stock is S$7.01. We will turn buyers closer to the S$6.70 level.

Source: OCBC

[winston]

not vested

SGX has proposed to acquire The Baltic Exchange

Could strengthen their market position as a purvey

How much do its cost?

Market is estimated the acquisition could worth some £84 mn (or S$117 mn), this translated to 63x FY15 PER or 3.2x PBR.

We view this price tag is a bit pricey on Baltic’s earnings but look reasonable on book valuation (excluding its £15.5 mn investment fixed asset, PBR will be around 7.8x).

After S$207 mn cash set aside for SGX-DC's clearing fund, as of end December 2015, SGX cash and cash equivalents of S$512 mn with zero gearing.

Investment Actions

Maintain “Accumulate” with lower new target price of S$8.28, based on its 24.5x average 5-year historical PER.

Potential catalysts including the market trading sentiments is improving sequentially, Jan-16 securities daily average value (SDAV) have increased 50% mom to S$1.2 bn as compare to S$0.9 bn in CY4Q15 and S$1.1 bn in CY15.

Source: Phillips

http://internetfileserver.phillip.com.s ... 160303.pdf

[winston]

not vested

Singapore Exchange (SGX SP): HOLD
Market Cap: US$6,412m | Average Daily Value: US$12.65m
Last Traded Price: S$8.05; Price Target: S$7.70 (Downside 4.3%) (Prev S$7.80)

Challenging outlook
3Q16 results slightly below; 5cts DPS declared
Improved market activities boosted Securities; derivatives hit by lower contract values
Securities and Derivatives markets remain challenging
Downgrade to HOLD; TP reduced to S$7.70

Downgrade to HOLD after stellar performance. Singapore Exchange (SGX)’s share price has surged 21% since our upgrade in January this year. Valuations on forward PE and P/BV basis are currently close to average, vs -2SD level back in January. We continue to see challenges persisting in the Securities market, as well as the Derivatives business. Downgrade to HOLD, TP reduced to $7.70.

3Q16 results slightly below; 5cts DPS declared for the quarter
3Q16 revenue was 3% y-o-y higher at S$205.8m while net profit was up 1% to S$89m. 9M16 revenue of S$620.1m and net profit of S$272.2m accounted for 71% of our full year estimates. Improved market activities boosted Securities revenue while derivatives hit by lower contract values. Securities accounted for 27% of total revenue in 3Q16 (24% in 2Q16), vs 40% for Derivatives (40% in 2Q16).

Boosting liquidity in the Securities market a major focus; derivatives is still the front-runner for growth. Derivatives will continue to be the main growth driver until SGX is able to monetise initiatives put forth to improve the Securities market microstructure.

Key priorities include:
(1) increase liquidity of the securities market;
(2) diversify its business mix; and
(3) maintain cost discipline.

We believe the results of these priorities would only be visible over the medium to long term.


Valuation:

We have tweaked our earnings forecast for FY16F/17F/18F down by 7%/4%/3%, after adjusting for lower derivatives contract value. Our TP is accordingly reduced to S$7.70, from S$7.80, based on the dividend discount model, which implies 24x FY16F EPS. Dividend yield is decent at 3.7% for FY16F.

Key Risks to Our View:
Market activity. Slower-than-expected market activity could derail revenue traction. Derivatives, a growing revenue generator, could be at risk if products do not generate sufficient trading volumes.

Source: DBS

[behappyalways]

not-another-singapore-sling
http://www.bloomberg.com/gadfly/article ... pore-sling

[winston]

not vested

Baltic Exchange in exclusive takeover talks with Singapore Exchange

by Bruce Barnard

The exchange, which is owned by around 380 shareholders, the majority from the shipping industry, is valued at between $100 million and $120 million.

The Baltic is best known for publishing the Baltic Dry Index, which charts benchmark freight rates for various commodities on a variety of routes and is seen as a key indicator of the health of the global economy.

The exchange also launched the first central freight derivatives platform, Baltex, in 2011, which enables shipowners to hedge against increasingly volatile dry bulk freight rates.

Source: JOC

http://www.joc.com/maritime-news/baltic ... 60525.html

[behappyalways]

singapore-exchange-buys-flashy-london-address

http://www.bloomberg.com/gadfly/article ... on-address

[behappyalways]

Singapore Exchange to Remain Closed for Day After Malfunction
http://www.bloomberg.com/news/articles/ ... ies-market

[behappyalways]

Singapore Exchange CEO Sorry for Halt That Angered Traders
http://www.bloomberg.com/news/articles/ ... ed-traders

[behappyalways]

Singapore Bourse Sees Rise in Delistings While IPOs Slip: Chart
http://www.bloomberg.com/news/articles/ ... slip-chart

[winston]

not vested

SGX's full-year earnings flat at $349 mil

By Joan Ng

SINGAPORE (July 27): The Singapore Exchange reported earnings of $349 million for FY2016 ended June, unchanged from the previous year.

Revenue increased 5% to $818.1 million.

SGX's earnings were negatively impacted by a $6 million impairment charge on its investment in the Bombay Stock Exchange.

CEO Loh Boon Chye called it a "consistent performance", adding that while it was a slower year for listings, derivatives continued to do well.

Revenue from securities trading and clearing declined $4 million to $205 million. Revenue from derivatives increased $30 million to $325 million.

Derivatives accounted for 40% of revenue versus 38% previously. Securities trading and clearing accounted for 25% versus 27% before.

Shares of SGX closed 0.5% higher at $7.74.

Source: The Edge