SGX

SGX: (S$7.94) Jun trading volumes continue to grow
SGX saw a pick-up in trading volumes across its securities, derivatives and commodities platforms in Jun ’15.

Securities' total value traded and average daily traded for the month both rose in tandem by 20% y/y (+8% m/m) to $25b and $1.2b, respectively, amid the volatility caused mainly by the Greece debt drama, IMF's downgrade of US economic growth and increased odds of a Sep interest rate lift-off by the Fed. For the month, there was one IPO and 37 bond listings, raising $12b.

Derivatives volume soared to 22m contracts (+152% y/y, +41% m/m), with daily trading volume of 1m contracts (+144% y/y, +31% m/m). Notably, FTSE China A50 futures totalled 14m contracts, more than five times y/y and +55% m/m.

Commodities delivered a solid performance, comprising SICOM rubber (+53% y/y; -9% m/m), iron ore and steel derivatives (+>100% y/y; +18% m/m) and forward freight derivatives (+1700% y/y).

For FYJun15, securities overall turnover slipped 4% to $274b with daily average value traded at $1.1b, while derivatives total volume gained 55% to 161m contracts with a daily average of 658,834 contracts.

The street maintains a mixed outlook for SGX, with 6 Buy, 10 Hold and 4 Sell ratings on the counter, and a consensus TP of $8.22.

With the leadership vacuum recently filled by former investment banker Loh Boon Chye, the street anticipates how Loh is able to drive more interest towards Singapore's financial markets.

At the current price, SGX trades at 22x forward P/E, in line with regional peers. The stock offers an indicative 3.5% yield.