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SINGAPORE Exchange, Asia's second-biggest listed bourse, on Monday posted its smallest profit in four quarters as new listings plunged and trading volumes slowed amid weakness in global markets.
SGX, which ranks behind Hong Kong Exchanges and Clearing , said its fiscal third quarter ended March had been 'a challenging quarter affected by the sharp downturn in global markets'.
The Singapore bourse reported a net profit of S$101.5 million for the three months to March, below the S$130 million to S$157 million earned in the preceding three quarters.
SGX earnings were, however, up 14 per cent from S$89.1 million a year ago - slightly below the S$103 million average estimate of 4 analysts polled by Reuters - as a jump in revenue from derivatives transactions offset a slight drop in securities market revenue.
'The main contribution to the growth in revenue came from derivatives market revenue, which jumped 36 percent to S$39 million,' SGX said.
Revenue from securities market trading, which typically account for about 60 per cent of SGX's revenues, fell slightly to S$96.3 million from 96.7 million a year earlier.
Operating expenses fell 5.1 per cent to S$53.4 million mainly due to a decrease in variable bonus provision.
SGX did not provide an outlook, but BNP Paribas, which has an underweight rating on the stock, said in a report ahead of the earnings announcement that it expects securities trading activity will remain weak in the months ahead.
SGX shares closed 4.2 per cent lower on Monday.
The Singapore bourse saw 11 new listings during the quarter, up from 10 during the same period a year ago.
SGX, like many other stock market operators around the world, has been trying to build its derivatives business by getting banks to launch new warrants and exchange traded funds (ETFs) in Singapore.
ABN AMRO Bank on Friday launched certificates that will track a commodities index designed by international investor Jim Rogers, while Taiwan stockbroker Yuanta in February launched structured warrants on three large Taiwanese electronic makers.
Shares of SGX fell 44 percent in the Jan-March period - more than Australian Exchange's 38 percent decline and Hong Kong Exchange's 39.6 per cent retreat - on fears that falling stock prices and trading volumes would eat into the Singapore bourse's earnings.
SGX's shares fared far worse than the benchmark Singapore index , which dropped 13 percent during the same period. -- REUTERS
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