SGX Q2 earnings up, interim dividend unchanged at 5 cents

A man walks past the SGX building in the central business district.
A man walks past the SGX building in the central business district.PHOTO: ST FILE

SINGAPORE - The Singapore Exchange (SGX) reported improved earnings for its second quarter, when the equities and fixed income segment was lifted by higher market activities.

Revenue for the three months ended Dec 31 was S$200 million, up 3 per cent year on year from a year ago, while net profit jumped 5 per cent year on year to S$88 million.

An interim dividend of 5 Singapore cents a share was recommended, unchanged from last year.

"Our results this past quarter reflect higher levels of market activities compared to a year earlier as the conclusion of the United States presidential election and clarity on the interest rates environment brought participants back to the market," SGX chief executive Loh Boon Chye said when announcing the results on Thursday (Jan 19).

During the quarter, securities daily average traded value rose 17 per cent to S$1.09 billion, and total traded value rose 17 per cent to S$69.8 billion.

As a result, equities and fixed income revenue was up 6 per cent year on year to S$101.4 million in the second quarter. This included securities trading and clearing revenue of S$52.1 million - accounting for 26 per cent of total revenue - up 12 per cent from a year ago.

This offset the 3 per cent drop in derivatives revenue, which was another 38 per cent of the group's total, to S$75 million.

The SGX was also able to keep expenses under control at S$97.2 million, unchanged from a year ago. Excluding one-off costs of the Baltic Exchange acquisition, which was completed in the second quarter, expenses would have been down 4 per cent year on year.

"Cost discipline will remain a key focus and operating expenses for financial year 2017 are now expected between S$405 million and S$415 million. This is S$15 million lower than the previously announced range of between S$420 million and S$430 million," Mr Loh said.

SGX shares rose three cents or 0.4 per cent to S$7.48, ahead of the results announcement.

Meanwhile, the bourse also announced after market close yesterday that it has tendered its 4.75 per cent stake in Bombay Stock Exchange, which is eyeing an initial public offering. The move will incur some S$2 million of disposal loss, which is not expected to have a material impact.