SGX

SGX: Announced 1Q11 results which was in-line, albeit at the higher end of estimates. Rev at $178m, +12% yoy and +11% qoq, while Net Profit at $87.5m, +17.9% yoy and +10.7% qoq. Ebitda Margins inched slightly higher at 64.6% vs 62.8% qoq. Strong performance was led by strong securities daily trading value (SDAV) for the qtr and record derivatives trading vol:

1) Securities: The revised minimum bid-ask spreads and continuous trading (CAT) saw improved liquidity and, at lower mkt impact costs by up to 40%. With CAT, trading activities that took place during 1230 to 1400 in Aug and Sept ranged from 5% to 15% of daily traded value or 9%. The SDAV level of $1.6b was about 9% higher than the $1.4b vs 4Q11.

2) Derivatives: Had record derivatives vol of 322,152 contracts per day, surpassing the last peak average daily volume of 315,650 contracts in 3Q11, in the context of increased market volatility.

Going forward, grp note that Mkt activity in the near term could be adversely affected by the prevailing uncertainty and challenging global macroeconomic outlook. Meanwhile, grp has announced a 4c interim div. Ratings are as follows:

DBSV maintains Fully Valued with $5.40 TP,
Deutsche maintains Buy with $7.60 TP,
HSBC maintains O/w with $8.20 TP,
Goldman Sachs maintains Netural with $7.23 TP.