- SGX's 1HFY25 PAT was ahead of MIBG expectations on stronger cash equities velocity and derivatives demand. These conditions are likely to persist as global geopolitical volatility and monetary & fiscal uncertainty increases. This should give SGX a competitive advantage as a deeply liquid risk management venue.
- - Read this at SGinvestors.io -
Operating leverage boost to cash equities
- SGX's 1HFY25 SDAV increased +9% h-o-h, while trading & clearing revenues jumped +18%. This shows inherently strong operating leverage.
- The drivers supporting elevated SDAV – safe haven flows amidst geopolitical risks, higher rates and corporate capital returns – are likely to persist going forward. This may catalyse IPOs too. Management is seeing a pipeline of new economy, larger REITs, consumer and healthcare candidates. We have raised our IPO assumption to 10 (vs 6) for FY25E.
- - Read this at SGinvestors.io -
- 1HFY25 market velocity was 40% - the highest since FY21. We think macro tailwinds and structural shifts could drive sustainable velocity to average 37% FY25- 27E vs.10-year average 32%.
- We raise FY25-27E segment revenues by 12-19%.
Derivatives, FICC to benefit from ongoing volatility
- Read more at SGinvestors.io.
