SGX to stay focused on multi-asset strategy

SGX to stay focused on multi-asset strategy

Singapore Exchange will stay focused on its strategies to develop a multi-asset marketplace even if the results may take time to come through, said chief executive Loh Boon Chye yesterday.

Mr Loh added that the bourse would not resort to knee-jerk changes to businesses or regulations, despite the weak market outlook.

"We need to stay the course on measures that we think will benefit the market," he told The Straits Times yesterday on the side of SGX's results briefing. "To expect almost immediate results is not practical and, for now, I don't think we should be thinking about any drastic and structural changes."

He was responding to questions on whether the bourse is running out of options to revitalise the stagnant stock market, an issue that again appeared in its second-quarter performance.

SGX's securities revenue in the three months to Dec 31 dropped 10 per cent year-on-year to $46.6 million, as the daily average traded value pared 11 per cent to $930 million.

The derivatives business, which contributed to 40 per cent of SGX's total revenue, managed only a marginal 1 per cent year-on-year growth to $77.6 million.

As a result, net profit for the period was down 3 per cent year on year to $83.7 million while revenue was $194.6 million, on a par with the $195.1 million recorded a year earlier. Earnings per share was down 3 per cent to 7.8 cents, while net asset value stood at 82.5 cents a share as of Dec 31, down from 91.2 cents a share as of June 30. An interim dividend of five cents per share was declared, to be paid on Feb 4.

Mr Loh noted that the weaker earnings were resilient amid bearish sentiment fuelled by issues such as rising interest rates and growth concerns around China.

Market conditions may be similarly choppy in the months ahead, but he added that the SGX will not deviate from its multi-asset strategy.

Under the strategy, SGX launched Bond Pro last month to provide an over-the-counter trading platform dedicated to Asian bonds.

The bourse also reaped the rewards of having a diversified business mix as its market data and connectivity revenue rose 8 per cent year-on-year to $21.6 million and depository services turnover increased 14 per cent to $29.3 million.

Mr Loh said: "We take a longer-term view on our businesses. Some of these things will come through in certain quarters, others may take more time. "

At the same time, the SGX is trimming expenses. This year it expects $415 million to $425 million in operating expenses, down from the previously projected range of $425 million to $435 million. SGX shares closed down 3.48 per cent or 24 cents to $6.65 yesterday, ahead of the results announcement.

This article was first published on January 21, 2016.
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