SGX

SGX: results came amidst a year that contained the two worst quarterly daily average traded value (and three of the worst five) since the GFC, but numbers were still slightly ahead on consensus estimates. 4QFY14 net profit fell 11.6% to $77.4m while revenue fell 14.7% to $172.6m. Securities revenue led the decline with a 31.6% fall to $53.3m. Derivatives revenue too fell 11.5% to $52.2m. On a full year basis, securities revenue fell 18% to $226.9m (33% of revenue) as average traded value slumped 23% on record low volatility. In addition, short term speculative interest has declined post Oct’13. Derivatives’ FY14 revenue increased 3% to $201.9m (30% of revenue), as volumes were up the same quantum, with China A50, India Nifty and Iron Ore achieving record volumes, offset by a normalizing in Nikkei 225 futures. HSBC expects recovery ahead, noting that global environment looks supportive of emerging market fund flows, which benefits SGX as the “Asian gateway”. Accelerated RMB internationalization could also benefit Singapore, which serves as a liquidity hub for offshore RMB in ASEAN Market. Final dividend of 16¢ declared, bringing full year dividend to 28¢. Latest broker ratings: CLSA upgrades from Underperform to Outperform with TP raised to $7.70 from $7.00 HSBC maintains Overweight with reduced TP of $7.80 (from $8.20)