Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
CIMB in an Oct 11 research report says: "A long-drawn recession is SGX's bane. Although SGX benefits from current volatility, volumes suffer in a protracted recession when market interest peters out. Current share price have factored in that anticipated market lethargy though.
"Our DDM-based target price falls from $8.14 to $5.93 (discount rate: 9.5%, terminal growth 3.5%), after the earnings cut. In our view, current valuations are not excessive enough to call a sell, especially when there could be earnings upside from new initiatives such as REACH, and the re-pricing of derivative contracts.
"We cut FY2012-2014 average daily turnover assumptions by 16-18% and earnings fall 12-14%. We would be convicted buyers at 16x CY13 P/E, or $4.67. MAINTAIN NEUTRAL."
Company Name: SINGAPORE EXCHANGE LIMITED
| Research House: CIMB | Price Call: HOLD | Target Price: 5.93 |
CIMB in an Oct 11 research report says: "A long-drawn recession is SGX's bane. Although SGX benefits from current volatility, volumes suffer in a protracted recession when market interest peters out. Current share price have factored in that anticipated market lethargy though.
"Our DDM-based target price falls from $8.14 to $5.93 (discount rate: 9.5%, terminal growth 3.5%), after the earnings cut. In our view, current valuations are not excessive enough to call a sell, especially when there could be earnings upside from new initiatives such as REACH, and the re-pricing of derivative contracts.
"We cut FY2012-2014 average daily turnover assumptions by 16-18% and earnings fall 12-14%. We would be convicted buyers at 16x CY13 P/E, or $4.67. MAINTAIN NEUTRAL."
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