SGX reports fiscal 3Q net profit slipped amid higher expenses, lower securities revenue

Signage at the SGX building on Shenton Way in Singapore; taken October 2018.Signage at the SGX building on Shenton Way in Singapore; taken October 2018.

Singapore Exchange reported Thursday its fiscal third quarter net profit fell 1 percent on-year to S$99.7 million amid higher expenses and lower equities and fixed income revenue.

Operating revenue for the quarter ended 31 March increased 3 percent on-year to S$228.8 million, the stock exchange operator said in a filing to SGX after the market close.

Operating expenses for the fiscal third quarter rose 6 percent on-year to S$110.6 million, mainly on higher staff costs and technology expenses, SGX said.

Loh Boon Chye, CEO of SGX, said that the securities business performed in line with global markets as investors turned more cautious, but he pointed to a record derivatives performance, with daily average volume hitting more than one million contracts for the first time.

“Our derivatives business remains strong, as we are the only exchange that provides comprehensive access to Asian markets across asset classes. Our innovative derivatives products will open up opportunities to capture new revenue streams in the coming years,” he said in the statement.

“We also anticipate an improvement in our securities business. The recent halt in interest rate hikes will benefit equities markets, particularly our REIT sector,” he added.

Equities and fixed income revenue fell 22 percent on-year in the quarter to S$83.6 million, accounting for 37 percent of total revenue, down from 49 percent in the year-earlier quarter, SGX said.

Securities daily average traded value declined 30 percent on-year to S$1.02 billion, it said.

Issuer services revenue fell 8 percent on-year to S$18.9 million in the quarter, accounting for 8 percent of total revenue, down from 9 percent in the year-ago period, it said.

Securities trading and clearing revenue for the quarter fell 30 percent on-year to S$43.3 million, SGX said.

However, derivatives revenue climbed 32 percent on-year in the quarter to S$119.0 million, accounting for 52 percent of total revenue, the filing said.

The company proposed a dividend of 7.5 Singapore cents a share, up from 5.0 Singapore cents in the year-ago quarter.


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