Oct 19, 2012

Singapore - Singapore Exchange First-Quarter Profit Falls 15 Percent

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Singapore Exchange Ltd. (SGX), operator of Southeast Asia’s biggest stock market, said first-quarter profit dropped 15 percent as stock and derivatives trading volumes fell.

Net income was S$74.3 million ($61 million) in the three months ended Sept. 30, from S$87.5 million a year ago, the company said in a statement today. That compares with the S$75 million average of six analyst estimates compiled by Bloomberg. Operating revenue declined 10 percent to S$160.5 million.

“Securities and derivatives volumes have held up well relative to other markets,” Chief Executive Officer Magnus Bocker said in the statement. “Open interest for derivatives contracts achieved a record high in September, reflecting SGX’s stature as a clearing house of choice in Asia. We are also pleased to see increased capital raising activities this quarter.”

The average value of equities traded daily slipped 15 percent to S$1.36 billion in the July-to-September quarter from a year earlier, according to data compiled by Bloomberg. While average daily derivatives trading volume dropped 4.8 percent to 306,811 from a year earlier, open interest climbed to a record high of 2.3 million contracts on Sept. 26, SGX said.

Companies raised about $1.7 billion from initial public offerings in Singapore in the three months through Sept. 30, compared with $125 million in the same period last year. IHH Healthcare Bhd. and Far East Hospitality Trust were among this year’s biggest IPOs.

Lost IPOs

While SGX has been trying to woo international companies to list on the city’s bourse, it lost IPOs such as Manchester United Ltd., the English soccer team with a record 19 national league championships, which listed in the U.S. Formula One’s stock sale in the city, where it hosts the sport’s first night race, has been put on hold.

“The numbers are basically in line with expectations,” said Leng Seng Choon, the co-head of research at DMG & Partners Research Pte in Singapore. “There’s some improvement from the mergers and acquisition activities in the recent quarter, that did help the average daily turnover.”

Jonathan Burgos



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