by winston » Fri Apr 24, 2020 10:51 am
not vested
Singapore Exchange ($10.16, down 23 cents) reported 3Q FY2020 results.
Fixed Income revenue increased 24% to $4.0mln with listing revenue increasing 29% and corporate actions increasing 11%. There were 325 bond listings raising $135.8bln, compared to 276 listings raising $133.6bln a year earlier.
For Currencies and Commodities, derivatives revenue increased 23% to $41.5mln, accounting for 14% of total revenue.
Trading and clearing revenue grew as commodities futures volumes increased 34% to 7.0mln contracts.
This was driven primarily by increased volumes in our iron ore derivatives contracts.
Currency futures volume also increased 45% to 7.8mln contracts.
Treasury and other revenue increased mainly from higher treasury income. Treasury income increased primarily due to higher margin balances, which grew from higher open interest as
customers use our currency and commodity derivatives contracts for portfolio risk management.
Equities revenue increased 31% to $217.3mln, and accounted for 73% of total revenue.
Cash revenue increased 38% to $111.3mln, accounting for 38% of total revenue.
SGX recorded 5 new equity listings which raised $701.5mln, compared to 5 new equity listings
raising $38.6mln a year earlier. Secondary equity funds raised were $478.9mln
Daily average traded value (DAV) increased 58% to $1.61bln. Total traded value increased by 63% to $101.4bln. This was made up of Cash Equities , where total traded value increased by 64% to
$96.6bln, and Other Products, where traded value increased 39% to $4.8bln.
Equities derivatives revenue increased 24% to $106.0mln, accounting for 36% of total revenue. Clearing revenue increased as equity derivatives volume increased 24% to 61.5mln contracts.
This was mainly due to higher volumes in Nikkei 225, MSCI Taiwan, and Nikkei 50 index futures contracts.
Treasury and other revenue increased mainly from higher treasury income.
Treasury income increased mainly due to higher margin balances, which grew from higher open interest as customers use equity derivatives contracts for portfolio risk management.
Lastly, Data, Connectivity and Indices revenue increased 26% to $33.0mln, accounting for 11% of total revenue. Market data and indices revenue increased 53% mainly due to the consolidation of revenues from Scientific Beta Pte. Ltd, which was acquired in January 2020, excluding which, Market data and indices revenue would be comparable.
Connectivity revenue increased 7% from higher derivatives connectivity and continued growth of colocation services business.
Despite the robust performance by SGX, we recommend investors to “Take Profi t”. This is because :-
1) the results might have already been priced in due to recent price surge prior to the results and note that SGX is the only STI component stock that is positive for the year;
2) Valuations are not cheap at 26.8x PE and 10.3x PB and a lack of increase in interim dividend (being only maintained at 7.5 cents) will likely disappoint some on the yield front (2.9% dividend
yield) despite the good results; and
3) we note a hint of caution by Mgmt on their outlook as SGX expects a global recession and guided higher expenses due to their latest acquisition of Scientific Beta as well as potential normalization of “trading” and “new listing” volumes going forward as new accounts are limited by the “circuit breaker” period to at least 1 June’2020.
Source: Lim & Tan
It's all about "how much you made when you were right" & "how little you lost when you were wrong"