Muted growth: The reception area of the SGX headquarters is seen in Singapore. The firm says it will remain prudent in managing its expenses and capital expenditure. — Bloomberg
SINGAPORE: The Singapore Exchange (SGX) will expand its multi-asset offerings and drive the growth of its emerging products, says chief executive Loh Boon Chye, as the group reported its half-year results yesterday.
SGX posted a net profit of S$281.6mil in the first half of the 2024 financial year that ended Dec 31, 2023, a drop of 1% compared with S$284.6mil a year ago.
Its earnings before interest, taxes, depreciation and amortisation grew 3.2% to S$344.6mil.
Earnings per share stood at 26.3 Singapore cents.
But when adjusted to exclude certain non-cash and non-recurring items “that have less bearing on SGX’s operating performance”, the group posted a net profit of S$251.4mil, which is a growth of 6.2% year-on-year.
Adjusted earnings per share stood at 23.5 Singapore cents.
Its revenue also climbed to S$592.2mil, an increase of 3.6%.
Loh said: “Our multi-asset offering continued to serve our customers well in a persistently challenging macro environment.
“Our currency and commodity derivatives business has been a growing contributor to revenue, and our OTC FX franchise is making good progress with average daily volume consistently reaching US$100bil (S$133.9bil) in recent months.”
OTC FX refers to over-the-counter trading where currencies are traded through a broker-dealer network, which means it can take place round the clock rather than based on an exchange’s trading hours.
Currencies and commodities revenue increased 29.5% to S$148mil.
Out of this, OTC FX revenue accounted for 27.7%.
On the other hand, fixed income revenue decreased 8.4%.
There were 489 bond listings raising S$131.7bil, compared with 449 bond listings raising S$104.3bil a year earlier.
Cash revenue also declined by 5.6%. The SGX recorded four new equity listings, which raised S$19mil, while secondary equity funds raised came in at S$600mil.
Revenue from equities derivatives also fell by 6.9%.
Loh added that there could be muted global economic growth in the year ahead, with geopolitical concerns that may affect market sentiment and risk appetite.
“Nonetheless, the resilience of our multi-asset strategy as well as healthy financial position and discipline will enable us to capitalise on conditions across cycles,” he said.
“To drive growth, we will focus on expanding our solutions to capture opportunities in Asia, grow our emerging products and further strengthen our global distribution and network.”
The board has declared an interim quarterly dividend of 8.5 Singapore cents per share, payable on Feb 20.
This brings the total dividends in the first half of the 2024 financial year to 17 Singapore cents per share.
SGX added in a statement that it is cautious on the near-term outlook as prospects for global growth appear muted.
It said it will remain prudent in managing its expenses and capital expenditure.
It lowered its projected capital expenditure for the 2024 financial year to be within S$70mil to S$75mil, down from the previously stated S$75mil to S$80mil range.
Expense growth in the 2024 financial year is likely to be similar to the 3% year-on-year expense growth rate observed in the first half of the 2024 financial year, lower than the previously guided mid-single digit percentage range. — The Straits Times/ANN
