SGX

SGX: CS downgrades the counter to NEUTRAL with $8.25 TP, citing near term equities headwinds on the weak trading volumes the past two months. As a gauge, Nov's average daily turnover (ADT) was $0.93b, compared to the year-to-date average of $1.5b. House believe the longer-term stand-out area for SGX remains in derivatives, where it is starting to build critical mass in many products and SGX stands a good chance of becoming a regional trading hub for such contracts. However, nearer-term fortunes of the stock lie more in equities. In terms of overall revenue contribution for FY13, securities accounted for 37%, while derivatives make up 28%. According to house forecast for FY14, the derivatives segment should have an equivalent contribution to securities, estimated at 32% each for the segments.