Wednesday, April 18, 2012


SGX: 3QFY12 broadly inline with consensus.
Net profit came in at $77.8m, +16% yoy, +19% qoq. This was boosted by higher securities avg daily turnover (ADT) of $1.5b, as well as lack of merger expenses.
Securities related revenue rose by 22% qoq, but was still lower by 12% yoy.
Nevertheless, non-securities related revenues continued to come in strong, +10% yoy and +13% qoq, attributed to better interest and other income from the derivatives business.

On outlook. Goldman notes ADT has come down to $1.3b/ 1.2b in Mar/ Apr-TD, from the peak in Feb at $1.8b.
JPM expects consensus to reduce FY13 earnings and volume forecasts by ~5%, in line with recent trends. Says current street estimates imply $1.5b ADT for FY13 vs YTD volumes of $1.37b.

On High Frequency Trading, SGX indicated that added regulatory scrutiny combined with cautious feedback from current mkt participants will results in a more measured approach to the roll out. SGX also acknowledged that existing fee structures are unlikely to be appropriate for HFT activity. The co guided for a 12mth timeframe for introduction.
Other new initiatives in the pipeline include RMB pdts and Asean Link.

Goldman keeps at Neutral but raises TP to $7.20 from $7.
Deutsche keeps at Hold with TP $6.90.
JPM keeps at Neutral, lowers TP to $7.80 from $7.90.
BOA-ML maintains Underperform with TP $6.53.

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