CIMB has cut SGX to underperform, target $8.14

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: CIMB

Price Call: SELL

Target Price: 8.14

CIMB Research has downgraded Singapore Exchange (SGX) (SGXL.SI) to underperform from outperform and cut its target price to $8.14 from $10.12.

CIMB has lowered its securities value traded assumptions for SGX for 2012-2013 by 18-19% and cut its earnings per share estimates by 20-21%.

“A weak debut of American depositary receipts, plus a lack of real traction for new products makes it increasingly doubtful if a high-speed trading network can bring in global participants, as intended,” said CIMB in a report.

CIMB said SGX may be falling behind in its bid to capture more listings in the region.

Hong Kong’s watershed yuan-denominated Hui Xian REIT initial public offering could attract more such listings and undermine Singapore’s status as one of the leading real estate investment trust markets in Asia.

At 11:01 a.m., shares of SGX were 0.5% lower at $7.53 and have lost about 12% since the start of the year.