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SGX

Singapore Exchange - Continued positive outlook on shift towards Equities

Written By Stock Fanatic on Friday, October 4, 2013

What is the news?

SGX Ltd will be announcing its 1Q14 results on 17 Oct 2013. Based on monthly statistics recently released by SGX, 1Q14?s SDAV decreased (17.5%) q-q, (1.8%) y-y to S$1.329 billion. DDAV was (19.4%) weaker q-q, but 35.4% y-y to 0.415 million contracts.

How do we view this?

Due to economic concerns during the quarter, q-q trading activities for both the Securities and Derivatives were weaker than expected. On a y-y basis, 1Q14?s revenue is expected to be higher. Securities revenue is expected to be higher due to higher expected yield per dollar traded mitigating the marginally lower SDAV. Derivatives revenue is also expected to be higher due to the y-y higher DDAV. 

On a q-q basis, we expect lower revenue due to the lower trading activities for both Securities and Derivatives. 

On outlook, we continue to be positive for Securities and Derivatives. Markets are likely to be quieter relative to the earlier part of this year on concerns over both the pace of recovery of the global economy, and assessments over QE tapering by the US Fed. 

However, we continue to expect higher interest in global equities. Trading activities for both Securities and Derivatives are expected to increase as investors shift their interest from yield to growth. Continued q-q volatility is however expected.

Investment Actions?

We are positive on SGX on 

1) Higher Securities revenue forecast 

2) Strong Derivatives revenue 

3) Attractive dividends, with potential for increase. 

We adjust our forecast to reflect the lower SDAV and DDAV revenue expectations, but continued positive FY14 outlook. Based on our unchanged PE multiple of 24X, and lowered EPS of S$0.33, we derive a revised Target price of S$7.90. Based on current share price, we maintain our ?Buy? rating. (Read Report)

Source : Phillip Securities Research

 

SGX: trading and clearing volumes in Sep. Total securities turnover was $30.0b, +6% yoy, thanks to one more trading day in Sep for this year. Otherwise, the securities daily average value (SDAV) was up 1% to $1.4b. Catalist turnover rose 5x yoy to $2.9b. Derivatives continued to grow, as total futures and options volume increased 26% yoy to 8.9m contracts, led by a yoy doubling of China A50 Index Futures volume to 1.7m contracts. Meanwhile, SGX is becoming more attractive as a listing venue for early-stage mineral, oil and gas firms. Australian upstream O& G co Linc Energy announced plans to move its listing from Australia to SGX. Linc produces oil in US, and owns undeveloped coal and shale resources in Australia also possesses unique underground coal gasification UCG technology. Highlights listing on SGX will improve co's access to intl capital mkts and co " will be well positioned to capitalise on Spore's strategy to become one of the world's top 3 major O& G trading hubs" . Linc will hold EGM on 6 Nov, with shs expected to be admitted to SGX on 6 Dec.

 

 

SGX announced new mainboard admission rules and continuing listing obligations for mineral, oil and gas (MOG) companies. The new rules seek enhanced disclosure to better safeguard investors? interests, will come into effect 27 Sep. Admission standards for MOG aspirants that are not in production: i) Market cap > $300m based on issue price and post-invitation share capital ii) Discloses its plans, milestones and capital expenditure to advance to production stage. Requirements for all MOG companies: i) Existence of any resource or exploration results must be quantified ii) Have sufficient working capital for 18 months from listing iii) Have at least one independent director with appropriate industry experience and expertise iv) Appoint an audit firm with the relevant industry experience MOG companies are also required to include a valuation report on its reserves in the offer document, attached with an independent qualified person on any significant resource or reserve they have or find going forward.

 

CS reduced its forecast by 3% following review of Aug statistics, with overall equities volumes remaining subdued, albeit improving from July. TP reduced to $9.00 (from $9.25), implying 22x 12-month forward earnings (around its eight-year average). CS see downside risk to its forecasts (FY14E ADT of $1.5b) should current weak volumes sustain. House believe the SGX does have a solid longer-term growth profile as a regional hub (especially in derivatives), with nearer-term fortunes of the stock more market-volume related. CS note that Jul/ Aug is often a seasonally weak month, so would not read too much into the weakness. The stand-out area for SGX remains derivatives, where CS believe it is starting to build critical mass in many products and SGX stands a good chance of becoming a regional trading hub for such contracts.

 

Aug operating data. Securities daily average value was down 4% to $1.4b, despite Catalist turnover surging nearly 5-fold yoy to $1.4b. Growth continued to be driven by derivatives trades. Total futures and options volume rose 32% yoy to 8.6m contracts, boosted by China A50 Index Futures (doubled to 1.8m contracts yoy), Nifty Index Futures (volume +34% to 1.6m contracts). Meanwhile, the volume of OTC commodities cleared increased 29% yoy to 49,667 contracts, and volume of iron ore swaps cleared increased 53% yoy to 45,610 contracts.

 

SGX IS MOVING AGAIN ... :)

 

Seems you predicted quite close, this morning bear feelings around.

hotokee      ( Date: 28-Jul-2013 10:13) Posted: Be careful, don't be over confident. Evidence showing bearishness on the horizon for global stocks and Singapore stocks may not like to be standing on their own. Most of the time STI will copy other markets. Two clear signals are there raring the ugly head for the coming of the bears. 1.   The divergence in US Shares, where indices continuing upwards but many shares are falling down. 2.   China slower growth can cause concerns for investors as this also affects American stocks having their investments in China.   Only Chinese property counters are worthwhile because as the economy weakens, land and development resources will be cheaper and   helps future growth and profitability of these companies. 3. Britain is recovering from recession and this will attract investments that pull out from the US causing more catalysts for US shares to fall as a result. When US markets fall, we in Singapore will become more kiasu. Thus I warn that a bear is coming.   It is just a matter of time.   But how long the market will stay bearish after that, who knows?

 

Be careful, don't be over confident.

Evidence showing bearishness on the horizon for global stocks and Singapore stocks may not like to be standing on their own. Most of the time STI will copy other markets.

Two clear signals are there raring the ugly head for the coming of the bears.

1.   The divergence in US Shares, where indices continuing upwards but many shares are falling down.

2.   China slower growth can cause concerns for investors as this also affects American stocks having their investments in China.   Only Chinese property counters are worthwhile because as the economy weakens, land and development resources will be cheaper and   helps future growth and profitability of these companies.

3. Britain is recovering from recession and this will attract investments that pull out from the US causing more catalysts for US shares to fall as a result. When US markets fall, we in Singapore will become more kiasu.

Thus I warn that a bear is coming.   It is just a matter of time.   But how long the market will stay bearish after that, who knows? 

 

 

FV from $6.80 to $8.10 ..this shows what a joker is capable of doing.

MrSGX never depend on the so-called analysts' TP/FA out there, read read only no harm but never follow.. best to depend on own analysis.

SGX is a blue-chip with zero debt n tremendous growth potential.. MrSGX not surprise if its share price say hallo to $10 n above anytime.

..


 

WanSiTong      ( Date: 27-Jul-2013 23:06) Posted: SGX’s 4QFY13 core net profit rose 68% y-o-y (+5% q-o-q) to SGD103m, backed by average daily turnover (ADT) in the securities market of SGD1.6bn (+42% y-o-y -7% q-o-q), and a record quarter for derivatives. Dividends, however, were slightly disappointing. OSK-DMG raises its FY14 net profit forecast by 7% and its FV to SGD8.10 (23x CY14 EPS) from SGD6.80. Upgrade to Neutral from Sell.

 

 

and don't forget they are going to increase the maintenance fees  for the listed Cos. Huat ah !

  Bottom line will be boosted !!

Mr_SGX      ( Date: 26-Jul-2013 10:28) Posted: Make no mistake, SGX is one of the better good quality stock around.. very good growth potential, reasonably good dividend payout, zero debt etc. MrSGX like like..

 

Make no mistake, SGX is one of the better good quality stock around.. very good growth potential, reasonably good dividend payout, zero debt etc.

MrSGX like like.. 

 

Very obvious, there r many blur blur who dun know the potential of SGX.. either the blur blur dun know the stock, or the blur blur simply dun know what stocks trading/investing is all about.

  how funny.. 

 

Every year it will drop below $7.00 you will see. SGX do not have that kind of profitablility like other Stock Exchange in London or Australia not to compare with Hong Kong.

WanSiTong      ( Date: 24-Jul-2013 22:08) Posted: Chances for you to buy back below $ 7 is very slim! You will see the 18 cents dividend  lou noa ! WanSiTong      ( Date: 24-Jul-2013 21:15) Posted: Since 1/1/2013 it never close below $7. Huat ah

 

Chances for you to buy back below $ 7 is very slim! You will see the 18 cents dividend  lou noa !

WanSiTong      ( Date: 24-Jul-2013 21:15) Posted: Since 1/1/2013 it never close below $7. Huat ah ! Hawkeye      ( Date: 24-Jul-2013 17:12) Posted: Buy back below $7.0

 

Market will decide what is their true value !

WanSiTong      ( Date: 24-Jul-2013 21:41) Posted: Can you differentiate between Poor financial performance & Poor financing? Hawkeye      ( Date: 24-Jul-2013 16:09) Posted: Then what is SGX poor performance - Trading volume need to improve to 5billion per day? Singapore? At 3% return - Cosco and Yangzijiang is better. Cosco Poor Financing? it a SOE and had preferrential chinese bank consideration. SGX growth is at the most $8.00 and true value now only $6.50. Exchange expectation is its yield and product and at this moment they ran out of idea. Get road block everywhere around the world

 

Can you differentiate between Poor financial performance & Poor financing?

Hawkeye      ( Date: 24-Jul-2013 16:09) Posted: Then what is SGX poor performance - Trading volume need to improve to 5billion per day? Singapore? At 3% return - Cosco and Yangzijiang is better. Cosco Poor Financing? it a SOE and had preferrential chinese bank consideration. SGX growth is at the most $8.00 and true value now only $6.50. Exchange expectation is its yield and product and at this moment they ran out of idea. Get road block everywhere around the world. WanSiTong      ( Date: 24-Jul-2013 16:03) Posted: COSCO is due to poor financial performanc

 

Since 1/1/2013 it never close below $7. Huat ah !

Hawkeye      ( Date: 24-Jul-2013 17:12) Posted: Buy back below $7.00 Hawkeye      ( Date: 24-Jul-2013 17:07) Posted: Ya agreed, I have it in CPF and cash at $6.50 and take dividend as usual and cash sell it before dividend at 7+++ then wait and buy back below $6.00 to collect 4cts 4cts 4cts then sell it again. LOL Just that its disappointing for " low" dividend payout and actual earning per share. Expect its business will have at least 30cts dividend at this year of very good trade volume. Guess its its limit. Anyway Singapore is just one small island can not compare with the big countries potential

 

Buy back below $7.00

Hawkeye      ( Date: 24-Jul-2013 17:07) Posted: Ya agreed, I have it in CPF and cash at $6.50 and take dividend as usual and cash sell it before dividend at 7+++ then wait and buy back below $6.00 to collect 4cts 4cts 4cts then sell it again. LOL Just that its disappointing for " low" dividend payout and actual earning per share. Expect its business will have at least 30cts dividend at this year of very good trade volume. Guess its its limit. Anyway Singapore is just one small island can not compare with the big countries potential. chris168      ( Date: 24-Jul-2013 16:33) Posted: Start selling some, 7+5 at 7.66 from 2 accounts. I am quite happy with SGX. It gives pretty good returns bought this round at 7.03-7.06. I still  have more than 30 lots left.. see how it goes no hurry.