SGX

SGX: 4QFYJun12 results largely in line, excluding a one-off write down of $11m on an investment in the Bombay Stock Exchange. Core net profit at $72.1m, -7% qoq, -9% yoy, marking the second consecutive year of EPS decline for SGX. Total revenue was $157.8m, -4% qoq, -2% yoy. Securities revenues were weak as expected, at $54.0m, -17% qoq, -14% yoy. But derivatives were strong, at $44.3m, +4% qoq, +26% yoy. Mgt says SGX is now the biggest offshore venue for derivatives in Asia, with 25% mkt share. Expenses overall, were down slightly, at -1% qoq, -3% yoy. CIMB maintains Neutral but raises TP to $7.26 from $6.98. Deutsche keeps at Hold with TP $6.90. Says 4Q12 represents a decent performance in tough market conditions, but notes the lack of a sustained bull mkt recovery means lack of catalysts for rerating. Citi maintains Sell with TP $5.81, based on 19.3x FY13e P/E, avg daily turnover of $1.45b/day. Notes medium risk of P/E derating if pricing structure or ROE comes under pressure, or SGX enters into an acquisition which is earnings dilutive or curtails div payout.