SGX: in a second quarter FY16 results preview for SGX, Deutsche expects cost control to come to the forefront.
House expects results to be weak with earnings down 22% q/q to $77.5m, as securities average daily traded hit a 10-year low of $930m and derivative average daily value fell on tepid China A50 volume in the quarter.
With CY16 continuing in a similar vein, Deutsche expects the new CEO to revisit SGX's investment plans going forward, including the possibility of cutting FY16 opex target.
That being said, given CY15 underperformance vs. peers, SGX's valuation remains attractive, which explains its Buy rating and target price of $9.40.
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