CIMB downgrades SGX to underperform

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: CIMB

Price Call: SELL

Target Price: 5.86

CIMB Research downgraded Singapore Exchange to underperform from neutral and cut its share-price target to $5.86 from $5.93.

Singapore Exchange warned market activity in the near-term could be hit, even as it posted an 18% forecast-beating rise in quarterly profit on strong derivative revenues. 

CIMB cut its fiscal 2012-2014 earnings-per-share estimate as it expects costs to rise from the second quarter, and as October’s daily trading value was not promising, the brokerage said.

“Sure, first quarter results were good, with cost-control the star. Unfortunately, subdued costs are a mirage with revenue reflecting a quarter when market lethargy has yet to set in,” CIMB said in a report.

Shares of SGX is down 1.3% at $6.21 as at 11:38 a.m.