Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
SGX: S$7.41 BUY (TP: S$8.90)
All day trading from 1 Aug
SGX announced that its securities market will trade continuously all day
from 1 Aug. This will mean a greater overlap with those of other Asian
exchanges, which will enable investors trading pan-Asian securities to
better respond to regional market movements and news flow. Continuous
all-day trading will also enhance Singapore's competitiveness as an
international financial centre.
We remain bullish on SGX given its various initiatives to stimulate
trading. Besides continuous all-day trading, SGX is also reducing the
securities market minimum bid size, effective 4 Jul 2011 - SGX estimates S
$1.7b in annual savings for investors. Effective 8 Jul 2011, Singapore
government bonds can also be traded on SGX, which is expected to improve
price transparency and liquidity in SGS bonds.
Whilst recent securities market average daily turnover (ADT) numbers are
weak, with Jun 11 ADT of S$1.24b (versus Jan-Mar 2011 ADT of S$1.71b), we
believe these new initiatives could drive ADT higher as we move into FY12
(SGX year-end is Jun). We maintain BUY on SGX with a target price of S
$8.90, which is pegged to 22x FY13 EPS, on our assumed FY13 ADT of S$2.02b.
Company Name: SINGAPORE EXCHANGE LIMITED
| Research House: DMG | Price Call: BUY | Target Price: 8.90 |
SGX: S$7.41 BUY (TP: S$8.90)
All day trading from 1 Aug
SGX announced that its securities market will trade continuously all day
from 1 Aug. This will mean a greater overlap with those of other Asian
exchanges, which will enable investors trading pan-Asian securities to
better respond to regional market movements and news flow. Continuous
all-day trading will also enhance Singapore's competitiveness as an
international financial centre.
We remain bullish on SGX given its various initiatives to stimulate
trading. Besides continuous all-day trading, SGX is also reducing the
securities market minimum bid size, effective 4 Jul 2011 - SGX estimates S
$1.7b in annual savings for investors. Effective 8 Jul 2011, Singapore
government bonds can also be traded on SGX, which is expected to improve
price transparency and liquidity in SGS bonds.
Whilst recent securities market average daily turnover (ADT) numbers are
weak, with Jun 11 ADT of S$1.24b (versus Jan-Mar 2011 ADT of S$1.71b), we
believe these new initiatives could drive ADT higher as we move into FY12
(SGX year-end is Jun). We maintain BUY on SGX with a target price of S
$8.90, which is pegged to 22x FY13 EPS, on our assumed FY13 ADT of S$2.02b.
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