Singapore Exchange reports fiscal 1Q net profit climbed 25 percent

SGX building on Shenton Way in SingaporeSGX building on Shenton Way in Singapore

Singapore Exchange reported Thursday its fiscal first quarter net profit climbed 25 percent on-year to S$114 million as revenue increased across all four major business segments.

Revenue for the quarter ended 30 September rose 19 percent on-year to S$248 million, the securities exchange operator said in a filing to SGX.

“We had a strong start to FY2020, with robust performance across all key financial metrics and the highest quarterly net profit in more than 10 years. This is our first set of results following our re-organisation to capitalise on our strengths as an international multi-asset exchange,” Loh Boon Chye, CEO of SGX, said in the statement.

“The growth across our three business segments is largely due to our broad-based efforts in expanding our global client base and ensuring we meet our clients’ risk management and capital efficiency needs,” Loh added.

In the fixed income, currencies and commodities (FICC) segment, revenue increased 57 percent on-year in the quarter to S$45.8 million, accounting for 19 percent of total revenue, up from 14 percent in the year-ago period, the filing said.

“Our Fixed Income, Currencies and Commodities (FICC) business reported record trading volumes in currency and commodity futures. Through our international presence, we achieved higher participation from global financial institutions, and saw customers trading a wider range of products across asset classes,” SGX said.

Equities revenue, which includes cash equities and equities derivatives, increased 14 percent on-year to S$176.1 million, accounting for 71 percent of total revenue, down from 74 percent in the year-ago period, SGX said.

“Our equity derivatives business grew as international investors continued to manage their portfolio risks via SGX,” the filing said. “Our cash equities business saw comparable activity amid mixed performances in regional markets, as investors remained cautious due to ongoing global trade and political uncertainties.”

Data, connectivity and indices revenue rose 4 percent on-year to S$25.7 million, accounting for 10 percent of total revenue, down from 12 percent in the year-ago period, SGX said.

SGX declared an interim dividend of 7.5 Singapore cents, unchanged on-year.

In its outlook, SGX said it expected a prolonged period of low interest rates amid a global economic slowdown.

“SGX remains well positioned to offer investors solutions to invest and to manage their Asian portfolio risks,” the exchange said.

“In the coming months, we will continue to tap on our international network and partnerships to grow our customer base, widen our geographical reach by exploring new markets, and seek new investment opportunities to enhance our current capabilities,” it added.

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