SGX

SGX: Share price continues moving to new 5-year highs, as market watchers expect that the exchange will benefit from the recent increase in securities activity, and the surge in China/HK shares will result in higher turnover of derivatives e.g the China A50 futures.

Separately, market watchers pointed to a report by a foreign broker last week, which mooted the idea of a Singapore-China link connect one day, highlighting that Singapore boasts good relationship with China, being the second destination after Hong Kong to offer Rmb clearing services, while with sufficient Rmb liquidity, Singapore will also have the ability to clear these transactions.

Additionally, Chinese investors could find themselves familiar to some of the PRC companies listed on SGX, while the established REITs and business trusts sector in Singapore could attract them given the high dividend yields. Furthermore, SGX also offers exposure into the high growth markets of Asean.

Going forward, investors could also expect SGX to be on the lookout for further tie-ups and JVs in the commodities and derivatives segment as it attempts to diversify from its traditional securities business and increase its product offering.

At the current price, SGX trades at 27.2x forward P/E, versus Hong Kong Exchange’s 46.2x and Bursa Malaysia’s 22.5x.

Overall, the street has 6 Buy, 11 Hold and 3 Sell ratings with a consensus TP of $7.89.