SGX's Q3 net profit hits 10-year high of $100.5m

Strong showings in derivatives and securities propel 21% rise

SGX's board has declared an interim dividend of five cents per share, unchanged from a year ago, and payable on May 8.
SGX's board has declared an interim dividend of five cents per share, unchanged from a year ago, and payable on May 8. PHOTO: REUTERS

Strong performances in the derivatives and securities segments helped Singapore Exchange's (SGX) net profit for the third quarter to rise 21 per cent to $100.5 million - its highest in 10 years.

Earnings per share rose to 9.4 cents, from 7.8 cents a year ago. Revenue climbed $19.6 million, or 10 per cent, to $222.2 million, hitting the highest level since the bourse was listed in 2000.

SGX chief executive Loh Boon Chye said the bourse has actively engaged liquidity providers and focused on outreach to investors, which contributed to the 17 per cent on-year increase in the securities daily average traded value to $1.45 billion.

"Our marketing efforts, together with longer trading hours enabled by our new derivatives trading and clearing platform, added to an increase in global participation across products and trading sessions," Mr Loh said yesterday at a briefing for the media and analysts.

SGX's board has declared an interim dividend of five cents per share, unchanged from a year ago, and payable on May 8.

On why the board of directors did not "reward" shareholders with higher dividends in the light of its performance, Mr Loh said SGX already has a very high dividend payout ratio of 86 to 90 per cent.

Asked if the 20-odd per cent growth in net profit was sustainable, Mr Loh replied: "What we can be certain about, is continuing our effort in advancing our securities market through constant outreach and research. For derivatives, the extended trading hours of 22.5 hours is a permanent feature that has contributed to volumes and revenues to our market. We will also capitalise on our global distribution network to reach out to new customers."

  • AT A GLANCE

  • Revenue: $222.2 million (+10%)

  • Net profit: $100.5 million (+21%)

  • Interim dividend per share: 5 cents (unchanged)

Looking ahead, he said: "Market activity is expected to improve as investors seek avenues to manage their portfolio risk. We will continue to build on our multi-asset offerings and increase our servicing and marketing efforts across our domestic and international client base. We will also strengthen our global network through strategic partnerships and alliances."

In the three months ended March 31, SGX's equities and fixed income - comprising issuer services, securities trading and clearing, and post-trade services - rose 5 per cent on-year to $107.9 million, accounting for 49 per cent of total revenue, compared with 51 per cent a year ago.

SGX has guided that its operating expenses for FY2018 will be between $410 million and $420 million. Technology-related capital expenditure will be between $60 million and $65 million.

SGX ended at $7.56 yesterday, down three cents. About 1.6 million shares changed hands.

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A version of this article appeared in the print edition of The Straits Times on April 21, 2018, with the headline SGX's Q3 net profit hits 10-year high of $100.5m. Subscribe