SGX

SGX: Daiwa maintains Hold and lowers TP to $6.35. House note that trading volume appears to be on a downtrend, having declined for four of the past six mths. An apparent switch in strategy from organic growth to acquisitions likely would heighten execution risk.

Add that while stock is trading at a 2012E P/E of 21.3x (in line with its pastfive-yr P/E), a move from organic growth to acquisitions would raise acquisition risk. SGX appears expensive relative to Hong Kong Exchanges (HKEx), trading at 2012E P/E of 20x (discount of about 35% on its past-five-year P/E).