Singapore Exchange (SGX) suffered its weakest quarter in over a year as net profit for the second quarter ended December 2013 fell 2 per cent to $75 million from $76.3 million a year ago.

A penny stock rout in the local bourse over the period which bruised investor sentiment and hurt trading volumes was the main culprit.

Revenue rose 2 per cent to $165 million from $162 million a year ago.

While the securities market was weak with total traded value and daily average traded value falling 18 per cent and 19 per cent respectively, the derivatives market held up well.

Securities revenue fell 13 per cent to $52.2 million from a year ago while derivatives revenue rose 16 per cent to $52.5 million. For the first time, the derivatives business' contribution to the exchange's total revenue is on par with that of the securities business which is at 32 per cent.

Admitting that the securities market faced a tough and challenging quarter due to lower participation by retail and institutional investors, SGX chief executive Magnus Bocker said the exchange will continue to invest in new products and services, expand international distribution and strengthen its regulatory and risk management.

"The weaker profit is not a big surprise. We expected it on the back of the penny stock crash last year which kept most investors away from the market," said a remisier.