SGX

SGX: Deutsche upgrades to Buy from neutral, with TP of $10.55 vs $8.55 previously, based on DDM valuation. Note that the ASX deal could bring abt meaningful valuation uplift, and rev oppourtunies are realistics from increased market data and connectivity revenues, neither of which are viewed as particularly difficult to achieve. Rev synergies are estimtated to boost EPS accretion by 33-57%...

Add that ASX will derive just $40m FY11E rev frm cash trading, suggesting limited downside for SGX and a small rev opportunity for potential competitors. If securities trading competition drives higher capital velocity, ASX rev could increase on greater clearing and settlement volumes.

Seperately, ASX has hired David Gazard, a former adviser to Tony Abbott, Australia's parliamentary opposition leader, to lobby lawmakers in support of its takeover by SGX. He will seek to persuade lawmakers - including one who is his brother-in-law - that the US$7.9 billion bid doesn't hurt Australia's national interests