Outages: SGX takes steps to speed up recovery

Exchange will submit final report on July 14 disruption by month's end

The Straits Times Index chart flatlined from 11.38am on July 14, after the SGX securities market ceased trading.
The Straits Times Index chart flatlined from 11.38am on July 14, after the SGX securities market ceased trading.

The Singapore Exchange (SGX) is compiling its final report on the July 14 trading glitch outage while also working with the industry to speed up recovery processes in the event of another disruption.

SGX chief executive Loh Boon Chye told a results briefing yesterday: "We have submitted our interim report to the regulators, and a final report will be submitted by the end of this month."

The outage - the longest trading disruption in SGX history - was caused by hardware issues but the resumption of trading was substantially delayed due to challenges in the orders and trade reconciliation process.

"What we'll map out for the industry, going forward, is the ad hoc file request that can speed up the intraday recovery process, and also include in our industry-wide exercise a wider set of scenarios to plan and rehearse," added Mr Loh.

The briefing also heard that the SGX struggled to lift earnings in the fourth quarter when revenue slipped 8 per cent year on year to $198.1 million. That pushed net profit down 20.1 per cent to $76.8 million for the three months to June 30.

Weak market sentiment sent trading down in the period, with equities and fixed income revenue dropping 6.7 per cent to $101.3 million. Derivatives revenue also slid, down 13.2 per cent to $74.5 million in the quarter.


  • REVENUE: $198.1 million (-8%)

    NET PROFIT: $76.8 million (-20.1%)

    FINAL DIVIDEND: 13 cents per share (-18.8%)

Revenue still gained 5.1 per cent to $818.1 million for the full year, generating a net profit of $349 million, a tad above the $348.6 million recorded a year earlier.

The board recommended a final dividend of 13 cents a share, down from 16 cents a year ago, but the total dividend remained unchanged at 28 cents. Earnings per share for 2016 was 32.6 cents, unchanged from a year earlier, while net asset value was 92.5 cents per share as at June 30, up from 91.2 cents a year earlier.

Mr Loh said the SGX's performance was "consistent" despite the market volatility, thanks in part to strong cost discipline. Total expenses in the year were $409 million, below the forecast range of $415 million to $425 million.

Still, the choppy market conditions were evident in the 10 per cent drop in full-year listing revenue to $46.7 million. Only 21 new equity and trust listings occurred during the year compared with 34 new listings in the previous 12 months.

Concerns about delistings have also arisen with Eu Yan Sang and SMRT joining the queue to be privatised since May but Mr Loh remains unfazed. "In the 12 months to July 2016, the total market cap of companies that have delisted or announced delisting is US$1.5 trillion (S$2 trillion) - three times of what it was three year ago," he said.

"What's important is that we work on what we can do to profile and highlight our (listed companies), to bring more IPOs (initial public offerings) here for fund-raising."

And if the Baltic Exchange acquisition is successful, the SGX can look forward to its own indices, adding another facet to its growth drivers in the next three to five years, he added. Talks over the acquisition are ongoing.

SGX shares closed up four cents or 0.52 per cent at $7.74, ahead of the results briefing.

A version of this article appeared in the print edition of The Straits Times on July 28, 2016, with the headline 'Outages: SGX takes steps to speed up recovery'. Subscribe