Published On: Sat, Jan 25th, 2014

SGX Posts Second-Quarter Net Profit of $75 million

Magnus Bocker CEO of SGX

Magnus Bocker CEO of SGX

Magnus Bocker, CEO of Singapore Exchange, said, “We posted second-quarter net profit of $75 million, down 2% from a year earlier. Our derivatives business saw sustained growth and now accounts for 32% of total revenue. The securities market had a challenging quarter due to lower participation by both retail and institutional investors. The global economy is showing moderate signs of recovery. We will continue to invest in new products and services, expand international distribution, and strengthen our regulatory and risk management capabilities.

During the last quarter, we extended our product suite to a new asset class, foreign exchange, by launching futures contracts for the Australian Dollar, Indian Rupee, Japanese Yen, Korean Won, Singapore Dollar and US Dollar.

We were also independently assessed by the International Monetary Fund as compliant with the latest and more demanding international standards for clearing and settlement. In addition, we were the first Asian clearing house authorised as a Derivatives Clearing Organization by US regulators.”

Results Summary

Total revenue was $165 million, up 2% from a year earlier. Expenses rose 6% to $76 million while net profit was 2% lower at $75 million.

Revenue from the securities business declined 13% from $59.8 million to $52.2 million, contributing to 32% of total revenue from 37% previously. Securities total traded value was 18% lower at $64.1 billion. The impact of the fall in trading was partially offset by a 6% increase in average clearing fee to 3.2 basis points due to an increase in uncapped trades.

Derivatives revenue grew 16% from $45.3 million to $52.5 million, also accounting for 32% of total revenue, up from 28% previously. Increased volumes for the FTSE China A50 futures, Nikkei 225 futures and options, and iron ore swaps contributed to the rise in revenue. Total volumes grew 18% to 26.3 million contracts while average month-end open interest grew 45% to 3.6 million contracts.

A total of nine listings in the quarter raised $1.4 billion compared with eight listings raising $0.8 billion a year earlier. New listings included Linc Energy, Pacific Radiance, Viva Industrial Trust and ValueMax Group. Total equity funds of $2.6 billion were raised, compared with $2.1 billion previously. A total of $33.7 billion was raised from 144 new bond listings, compared with 90 bonds raising $39.7 billion a year earlier.

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