ROBUST growth in derivatives trading boosted earnings at the Singapore Exchange in the third quarter.
Net profit jumped 16 per cent to $88.2 million for the three months to March 31, while turnover surged 20 per cent to $199.3 million.
Derivatives revenue, which increased 52 per cent year-on-year to $79.7 million, was the main driver, but the firm is also happy with progress in its securities segment, chief executive Magnus Bocker said yesterday.
"The securities market transformation is on track. This quarter, we introduced the reduction of board lot sizes from 1000 to 100 shares, and in March we introduced the 20 cent minimum price requirement on mainboard-listed companies," he said.
"It's still early days, but we are encouraged by what we've seen. Between Jan 19 and the end of March, 54 per cent of all our trades were orders below 1000 shares. The number of orders was up 35 per cent, and the number of trades was up 104 per cent, as a result of these changes."
Growth in securities revenue remained subdued at 1 per cent year-on-year to $52.8 million.
Revitalising this segment has been one of Mr Bocker's priorities, but he will be unable to see through the transformation as he will leave when his contract ends on June 30.
While securities were largely in the doldrums during the quarter, the derivatives business continued its growth, supported by the dominant FTSE China A50 Index futures, whose volume surged 165 per cent to 17.9 million contracts.
Beyond the derivatives exposure, the SGX is strengthening its links to the Chinese market. In February, it appointed listings head Lawrence Wong as head of China, and a memorandum of understanding was signed with Chengdu regulators to facilitate capital raising by companies there listed on the SGX.
But the bourse is not working on a stock trading link with Shanghai similar to the Shanghai-Hong Kong Stock Connect platform just yet, it said last week.
The bourse is also not starting its link with the Taiwan Stock Exchange on July 1, Mr Bocker noted, saying the partnership is still in the works and will likely begin in the first half of next year.
Earnings per share for the quarter rose 16 per cent from a year ago to 8.2 cents, while net asset value stood at 82.3 cents per share as at March 31, down 4.5 per cent from 86.2 cents per share as at June 30 last year.
An interim dividend of four cents per share was declared, payable on May 8. SGX shares closed 22 cents up at $8.52 ahead of the results briefing yesterday.
At a glance
Net profit: $88.2 million (+16 per cent)
Revenue: $199.3 million (+20 per cent)
Dividend: 4 cents per share (unchanged)
This article was first published on Apr 23, 2015.
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