Wednesday, July 6, 2011

Deutsche cuts target on SGX to $8.70; keeps buy

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: Deutsche BankPrice Call: BUYTarget Price: 8.70



Deutsche has lowered its target price on Singapore Exchange (SGXL.SI)to $8.70 from $9.50 to take into account lower earnings per share, but maintained its buy rating.

SGX will announce its 2011 fiscal year results on Aug 3 before the market opens, Deutsche said, forecasting that the bourse will report normalised fourth quarter net profit of $69 million, down 10% quarter-on-quarter.

Average daily equity market turnover declined 15% quarter-on-quarter in SGX's fourth quarter while average daily turnover in the derivatives market fell 13%, Deutsche said, adding that expenses have grown faster than revenues.
However, the bank said SGX's new trading platform, reduced bid-offer spreads and longer trading hours could attract high-frequency trading activity and improve earnings trends in 2012.
At 9:28 a.m., SGX shares were up 0.7% at $7.70 on a volume of 218,000 shares. The stock has fallen around 9% so far this year.

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