Singapore Exchange - Fuelled By Volatility
- We expect SGX's Share Price to be supported by elevated financial market volatility as the recovery of treasury income gets priced in. We project an expedited recovery in SGX (SGX:S68)'s treasury income towards ~16% of revenue in FY23-24F (FY21: ~10%) as Fed signals 6 more hikes in CY22F.
- SGX reported securities daily average value (SDAV) rose 21% y-o-y to S$1.6bn in Feb 22, rebounding strongly from the S$1.2bn average in 1H22. SGX’s China A50 trading volumes are steady.
- Reiterate ADD call on SGX. Continued geopolitical uncertainty should support demand for hedging solutions. SGX's valuations are inexpensive at 23x CY22F P/E.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
Andrea CHOONG CGS-CIMB Research | https://www.cgs-cimb.com 2022-03-21 2022-03-21
Previous report by CGS-CIMB:
2022-02-05 Singapore Exchange - Steadying The Ship
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