SINGAPORE: Singapore Exchange’s net profit rose 5.5% on the year to 88.3 million Singapore dollars ($61.9 million) for the second fiscal quarter ended Dec. 31, with trading and clearing fee revenue lifted by the stock rally following the U.S. presidential election and efforts to contain costs succeeding.
Revenue increased 2.6% on the year to S$199.6 million, thanks to a 6.3% rise in revenue from equities and fixed-income markets, on the back of a 17% jump in the daily average traded value of securities. “There is a positive shift in terms of sentiment” in the U.S., CEO Loh Boon Chye told a news conference Thursday.
But derivatives market performance disappointed. Despite trading volume rising 5%, revenue in the segment declined 3.4% on increased rebates the bourse had to pay out to clients in order to maintain its 90% share of the international iron ore derivatives market.
By closely watching spending and cutting contract workers, SGX kept expenses almost flat despite the rise in costs following the November acquisition of British maritime information provider Baltic Exchange.
Loh was upbeat on the outlook for initial public offering market. Although the 10 new listings from July to December missed the year-earlier tally, funds raised increased 52%. IPO numbers will be higher in the second half, Loh said. “The efforts over the last few months, our sectorial approach,” in marketing SGX as a listing venue are beginning to bear fruit, Loh said.
Despite the improved sentiment, “uncertainty around future U.S. policies and slowing Asian economies will influence trading activity going forward,” Loh warned in a news release. “We will continue to execute our strategy and diversify our revenues.”
