Thursday, October 28, 2010

SGX - Nomura cuts SGX fair value; tips ASX deal downside

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: Nomura


Nomura cuts Singapore Exchange (S68.SG) fair value to $9.30 from $10.00, factoring in lower ADR volumes; keeps at Neutral. Says ASX (ASX.AU) stock implying “high probability of deal failure,” only 21% chance of deal succeeding.



“Political statements coming out post the deal have increased concerns that regulatory hurdles would be a key stumbling block.” Says if deal goes through, SGX fair value is $8.20. 


Notes, benefits from exchange sector M&A in ” Adds, current SGX fair value factors in 13% addition to market volumes from ADRs by FY12; “It was not expected that volumes will pick-up from day 1. Even so, we see the volumes in ADR trading as being very disappointing,“ adding only 0.5% to volumes. 

Reduces ADR volume assumptions, reducing FY12-13 EPS forecasts by 7% each. Shares +0.8% at $8.91.

No comments:

Post a Comment