SGX latest move to launch clearing services next month for OTC trades on financial derivatives, is part of a plan to broaden its range of financial offerings & will give it 1st mover advantage in Asia. SGX will start clearing US & SGD interest rate swaps but plans to expand to other foreign currency options & futures. Spore is a big market for both these products, trading more than US$75bn/day (vs HK: US$19bn, Australia: US$41bn) in OTC interest rate derivatives and US$250bn/day on the OTC forex market. The centralized clearing of these OTC trades will reduce counterparty risks posed to the financial system & provides a long term growth opportunity for SGX. News comes just days after SGX announced plan to introduce trading of ADRs in Spore of 19 major Asian companies from Oct 22 in bid to boost market activity Credit Suisse, which has Outperform call with $9.40 target. DB also has Buy with $9.50 target.
The stock has broken clear of 1-year downtrend with resistance now tipped at $9.60.
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