Singapore Exchange reports fiscal 1H net profit fell 9 percent

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Singapore Exchange (SGX) reported Friday its fiscal first half net profit fell 9 percent on-year to S$219 million as expenses rose. 

Revenue for the six months ended 31 December was nearly flat at S$521.6 million, compared with S$520.8 million in the year-ago period, the exchange said in a filing to SGX. 

The underlying core businesses, excluding treasury income, posted revenue increased 6 percent on-year to S$501 million, with higher trading and clearing revenues from equity, currency and commodity derivatives. 

Subsidiaries BidFX and Scientific Beta posted aggregate revenue increased 20 percent on-year in the six-month period to S$40.4 million, accounting for 8 percent of total revenue. 

Operating expenses increased 8 percent on-year in the fiscal first half to S$215.6 million, mainly on higher staff costs and technology expenses, SGX said.

In addition, the share of losses of associated companies and joint ventures widened to S$6.0 million in the fiscal first half from S$600,000 in the year-ago period, SGX said.

Segment performance

FICC — or fixed income, currencies, commodities – derivatives — posted revenue for the fiscal first half rose 15 percent on-year to S$114 million, boosted b higher clearing revenue from BidFX and increased volumes in commodity and currency derivatives. 

Equities, including cash and derivatives, reported revenue fell 5 percent on-year to S$334.5 million as the trading and clearing, corporate actions and treasury segments declined, SGX said. 

The data, connectivity and indices segment posted revenue increased 3 percent on-year to S$73.1 million, with market data and indexes getting a boost from higher revenue from Scientific Beta and increased data subscription. 

An interim dividend of 8 Singapore cents was declared, unchanged on-year, bringing the year-to-date dividend to 16 Singapore cents, unchanged on-year.

Outlook

SGX was upbeat in its outlook, citing positive momentum in equity listings and products, as well as “clear interest” from potential issuers of special purpose acquisition companies (SPACs) and on Singapore’s initiatives to help high-growth enterprises raise capital on the public equity market. 

“Looking forward, we anticipate inflationary pressures and interest rates to rise as Asian economies recover. This could lead to higher demand for portfolio risk management solutions and access to growing Asian markets,” SGX said. 

“Treasury income will also recover with rising interest rates, albeit the recovery is expected to be measured in the near-term. In the coming months, we will focus on enhancing our multi-asset platform with new Asian currencies, metals, chemicals, and single-stock futures,” the exchange said. 

SGX kept its guidance for total expenses for the fiscal year at between S$565 million and S$575 million, with capital expenditure guidance unchanged at S$60 million to S$65 million. 

Read more details about SGX’s results.