SGX Q3 profit up 16% on strong derivatives growth

SINGAPORE - Singapore Exchange (SGX) today reported a 16 per cent increase in third quarter net profit to $88 million, as revenue went up 20 per cent to $199 million.

This was due mostly to a 52 per cent jump in the bourse's derivatives income to $79.7 million.

But all other units also recorded higher revenue, SGX said, with securities revenue rising 1 per cent to $52.8 million for the three months ended March 31.

The increase, while limited, came after the bourse rolled out market enhancement initiatives such as the reduction of board-lot size to 100 shares in January and the 20-cent minimum trading price requirement for Mainboard last month.

Against that backdrop, SGX's securities daily average traded value rose 8 per cent year-on-year to $1.2 billion in the quarter, while daily trading frequency by retail clients grew 56 per cent for blue chips between January 19 and March 31, higher than the 22 per cent increase of all stocks.

The derivative segment however remained SGX's quarterly highlight, driven by a 165 per cent rise in volumes of the FTSE China A50 Index futures to 17.9 million contracts. Derivatives revenue now accounts for 40 per cent of SGX's income.

Meanwhile, global commodities benchmarks benefited from a 280 per cent jump in iron ore volumes to 1.4 million contracts. Rubber volumes also rose 50 per cent to 146,000 contracts.

"The roll-out of the improvements to transform our securities market includes plans for a new-generation post trade system and will position us well for the future," chief executive Magnus Bocker said, referring to a move announced in March to introduce position accounts for clearing members of the Central Depository.

"In addition, our accelerated platform investments in our derivatives and fixed income businesses remain key pillars to our overall growth strategy," he added.

With the latest results, SGX's earnings per share rose 16 per cent from a year ago to 8.2 cents, while net asset value stood at 82.3 cents per share as at March 31.

An interim dividend of four cents per share was declared, payable on May 8.

SGX shares ended 22 cents higher at $8.52. The results were announced after market close.