- Strong November equity market data affirms our belief that Singapore Exchange (SGX) is structurally shifting to a higher average daily value traded (ADV) operating environment. With equity opex largely stable, this allows for significant upside earnings risks as operating leverage flows through.
- - Read this at SGinvestors.io -
Equity reforms = higher operating leverage
- In the past 10-years, SGX ADV has averaged S$1.2bn. Nov 25 market ADV was S$1.8bn. Compared to Jan 25 (just before the first MAS market reform recommendations were announced) ADV is 71% higher.
- - Read this at SGinvestors.io -
- In 2HFY25 when ADV increased 22%, opex increased just 1.6% y-o-y showing significant potential of capturing operating leverage.
- We raise FY26E-28E ADV by 7-8%, and believe this should largely flow through to earnings.
Rising IPO momentum could boost flows further
- Read more at SGinvestors.io.
