SINGAPORE (July 31): Despite its declining equities and fixed income business, the Singapore Exchange’s booming derivatives business has helped the bourse operator to post a stellar set of results for the full-year ended June.
SGX’s earnings were up 8% y-o-y at $391 million -- the highest in 11 years.
This translated to a bigger earnings per share of 36.5 cents compared to 33.9 cents a year ago.
The company’s revenue was also the highest since listing, up 8% y-o-y, to $909.8 million.
This came on the back of a record revenue contribution from SGX’s derivatives business, as well as higher revenue contribution from its market data and connectivity business.
SGX has proposed a final dividend of 7.5 cents per share, payable on Oct 18, 2019, bringing the total dividend for the year to 30 cents per share.
Overall, SGX attributed its strong performance reflects the combined strengths of its multi-asset businesses.
On its derivatives business, the company said higher volumes and open interest were driven by strong global institutional demand for Asian risk management and investment solutions.
It also noted that the second half of the year saw an improvement in its securities business as trading activity picked up.
Looking ahead, SGX Loh Boon Chye said SGX is positioned to grow and scale across different asset classes as Asia is expected to continue to play a leading role in global growth.
As financial markets in this region developed further with international participation, SGX anticipates greater demand for Asian equity portfolio risk management solutions, as well as access to Asian capital markets and products, he added.
As such, Loh was confident of SGX prospects despite slowing growth ahead and trade risks.
“Our multi-asset offerings put us in a robust footing to meet international demand for this area,” he says at a joint media and analyst briefing on Wednesday evening.
“In addition, we have invested in products, services and platforms, as well as investments in other companies to capitalise on trends on the individual asset classes.”
Meanwhile, Loh confirmed news reports that SGX has finalised an agreement with India’s National Stock Exchange (NSE) in regards to trades done in Nifty and Bank Nifty futures contracts.
The Economic Times reported that, as part of the arrangement, the futures contracts are to be executed in International Financial Services Centre (IFSC), Gift City, Gujarat.
SGX will enrol as a client of NSE in Gift City.
Both bourse operators have submitted their plans to the respective regulators in Singapore and India, says Loh.
However, he declined to reveal a timeline for when the approvals will be obtained and the implementation of the NSE-IFSC-SGX Connect.
“I would say we are optimistic that the joint proposal submitted by SGX and NSE will receive the support from our statutory regulators.
“Once we obtain our regulatory support, we will work with our key stakeholders on the operational and commercial details of the NSE-IFSC-SGX Connect. We will endeavour to implement the Connect promptly thereafter,” he says.
Shares in SGX closed 3 cents lower at $7.92 on Wednesday before the results announcement.
