SGX

SGX: SGX’s May volumes were strong—with equity average daily turnover and derivatives turnover growing 52% and 59%, respectively—boding well for 2013—with strength continuing into Jun. Key trends in May 2013 were as follows: - Equity markets (40% of revenues): May 2013 average daily turnover (ADT) of $1.78b, was up 52% y/y, and now above its 4Q13E of $1.6b. Although 4Q13-to-date ADT was in line, CS highlight that upside risk exists if current strong trend continues in Jun. - Derivatives markets (25%): Derivative volumes maintained their recent strong growth trend with volumes rising 59% y/y. CS highlight that the volumes have been strong since Feb 2012. - Depository services (15%): These fees are more based on equity volumes rather than value, which were up 41% y/y in May. - Listing (10%): Bond financing remained the main source. CS maintains its OUTPERFORM rating with TP of $9.25, implying 25x 12-month forward earnings (around its eight-year average).