SGX reports 9% rise in 2Q earnings to $97 million as derivatives business set record for second straight quarter
SINGAPORE (Jan 24): Singapore Exchange reported 2Q earnings of $97 million, or 9 cents per share, 9% higher compared to a year ago.
The board has declared an interim dividend of 7.5 cents per share, up from 5 cents last year.
Total revenue for 2Q also rose 9% to $224 million from a year earlier.
Revenue from derivatives increased 35% to $112.9 million and accounted for half of total revenue.
Revenue from equities and fixed income – comprising issuer services, securities trading & clearing and post trade services – declined 12% to $85.6 million, accounting for 38% of total revenue.
Revenue from issuer services revenue decreased 7% to $19.0 million, contributing to 8% of total revenue.
Revenue from securities trading and clearing revenue decreased 13% to $45.2 million and accounted for 20% of total revenue.
Revenue from post trade services revenue declined 16% to $21.4 million, accounting for 10% of total revenue.
In 2Q, securities daily average traded value (SDAV) declined 14% to $0.98 billion, with total traded value dipping 12% to $62.7 billion. This was made up of equities where traded value decreased by 14% to $57.2 billion, and other products where traded value increased 7% to $5.5 billion.
Expenses increased by 8% to $110.5 million, mainly due to higher staff costs and professional fees. Technology expenses was unchanged at $31.6 million.
Loh Boon Chye, CEO of SGX, says, “We achieved a second consecutive quarter of record performance in our derivatives business, with robust institutional demand for our risk management and hedging tools, including our MSCI Net Total Return index futures and FX futures contracts.”
However, Loh says investor sentiment was dampened by concerns on slower global economic growth and escalating trade tensions, which led to lower activity in its securities business along with other regional markets.
For the second half of FY2019, Loh expects investors to actively seek risk management solutions and investment opportunities, amid persistent global geopolitical and market uncertainties.
Shares in SGX closed 9 cents higher at $7.50 on Thursday. A year ago the stock was trading at $8.17.
