SGX

SGX: Credit Suisse keeps its Neutral rating & $9.00 target, highlights SGX may offer trading opportunities as its stock price & P/E ratio come close to 2-yr lows, Adds both absolute & relative valuations are looking attractive at 20x fwd P/E & at 27% discount to HKEx, which is near 3-yr low. Cites the 2 main reasons for the stock's underperformance are lackluster equity market volumes & perception of M&A risk.

Nevertheless, turnover velocity, which is a key driver of stock outperformance, is at cyclical lows of 50% & appears to have limited downside risk, & while M&As cannot be ruled out in the medium-term, near-term risk seems minimal (not at least due to the lack of suitable targets). SGX also has promising medium-term organic growth drivers, like expansion of OTC financials, growth of ADR & retail bonds as well as revenue contribution of co-location services later this year.

The stock is down 1.2% to $7.34, off support at $7.27.