Brokers' take

Singapore Exchange > Buy (Initiate) Maybank Kim Eng, Dec 20 Dec 23 close: S$7.43 Target price: S$8.30

WE initiate coverage of SGX with a "buy" and TP S$8.30, based on 23 times FY19E EPS, in line its P/E mean since 2012. SGX focuses on its multi-asset strategy to grow different businesses and asset classes. We see support from its strong cash position, healthy balance sheet and decent dividend yields of 4 per cent.

SGX is a good proxy to ride the cyclical upturn. We see scope for earnings to improve from: 1) higher market cap from healthy IPO pipeline, barring significant market risk-off sentiment; 2) stronger momentum of SDAV (securities daily average traded value); and 3) DDAV (derivatives daily average volume) growth to sustain on the back of higher open interest, expansion of its product offerings, and its ability to extend the derivatives value chain.