SGX

SGX: Trading activity on the securities market saw a dramatic yoy slowdown in Dec '11. Typically a slow month for the mkt, Dec was further hit by persisting issues such as the eurozone crisis and the health of the global economy. Total securities market turnover plunged 40% yoy in Dec '11 to 15.1b shs, while the value of trades -41% to $16.7b. However, activity on the derivatives mkt was relatively better, with the trading of futures and options rising 6% yoy to 5.1m contracts.

Credit Suisse has revised its SGX forecasts down by ~3-4% following “a very weak December." Drops TP to $5.85 from $6, keeps Underperform rating. "Although we deem the SGX to have a solid longer-term growth profile as a regional hub (with its IT lead a key competitive advantage), the nearer term fortunes of the stock are more market-volume related." The house notes that while further downside risk exists to SGX’s stock price should current weaker market conditions persist, it highlights that the stock is trading in line with longer term averages on most key financial metrics, both on a absolute and relative basis with respect to the S'pore overall mkt as well as regional exchange peers.