SGX Q1 profit rises 28% on broad growth despite IPO drought

SINGAPORE Exchange's (SGX) net profit rose 28 per cent in its fiscal first quarter with the only segmental slowdown coming from the quiet listings market.

The market operator is raising its first-quarter dividend payout to 5 Singapore cents per share from 4 Singapore cents a year ago. The stock closed at S$7.51 on Wednesday, down by 0.3 per cent or 2 Singapore cents, before the results were announced.

SGX net profit increased to S$99.3 million, or 9.3 Singapore cents per share, as operating revenue rose 30.1 per cent to S$219.6 million.

Operating revenue from securities grew 13.8 per cent to S$55.9 million as the daily average trading value for securities increased 27 per cent year-on-year to S$1.23 billlion.

The derivatives business contributed S$90.9 million of operating revenue, a 69.1 per cent year-on-year jump.

Operating revenue from issuer services declined by 5.8 per cent to S$21.4 million as listing revenue fell 12.1 per cent to S$11.8 million amid a drought in initial public offerings.

In a statement, SGX chief executive Loh Boon Chye said the exchange will be extending its market maker and liquidity provider programmes to mid- and small-cap stocks as part of efforts to improve liquidity on the securities market. Participants of those programmes, which offer incentives for creating liquidity in certain stocks, currently account for about 18 per cent of traded value after 18 months of implementation, SGX said.

"We are encouraged by the progress of our initiatives to increase the liquidity of our securities market and will continue to build on this momentum," Mr Loh said.