RHB raises SGX target price on record market performance, Scientific Beta divestment

[SINGAPORE] RHB raised its target price on the Singapore Exchange (SGX) to S$22.50 from S$22.20 while maintaining its “neutral” call, it said in a note on Tuesday (Jul 21).

The research house noted that SGX’s June market statistics came in “stronger than expected”, capping a record FY2026 for the bourse.

The total securities market trading value jumped 72 per cent year on year to S$44.6 billion.

Derivatives traded volume jumped 31 per cent year on year, and the derivatives daily average volume (DDAV) climbed 27 per cent year on year to 1.6 million contracts. On the cash equities side, the securities daily average value (SDAV) spiked by 72 per cent year on year to S$2.1 billion.

This surge in trading activity aligns closely with broader market exuberance.

According to the latest SGX market update on Monday, the Straits Times Index (STI) has been scaling record highs past June.

“The Straits Times Index (STI) reached a record high of 5,561.42 on 15 July and, and delivered a 21.2 per cent total return through 17 July, including an 18.6 per cent price gain,” SGX said.

RHB highlighted that trading activity has “broadened meaningfully”, with retail SDAV surging 52 per cent year on year to a 12-year high. Retail investors have remained net buyers for five consecutive months, contributing S$2.4 billion in cumulative net inflows for FY2026.

Positive on Scientific Beta divestment

Adding to the positive fundamental outlook is SGX’s strategic divestment of its wholly owned subsidiary, Scientific Beta, to Stoxx AG for about 23 million euros (US$26.3 million).

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SGX securities trading value jumps 72% in June, caps ‘stellar’ FY2026

RHB views this move positively as it removes “a likely earnings drag and sharpens management’s strategic focus.” Scientific Beta recorded a net loss of around S$15 million in the first half of FY2026.

Factoring in the robust June statistics, the RHB analyst has raised SGX’s net profit forecasts for FY2026, FY2027, and FY2028 by 1.4 per cent, 1.3 per cent, and 1.2 per cent, respectively.

Despite the strong operational performance, RHB remains cautious about valuation constraints.

SGX is currently trading at roughly 29 times FY2027 forecasted earnings, which represents a 19 per cent premium over its ex-India regional peers.

“While the premium is defensible on the basis of scarcity value and structural tailwinds from Singapore’s regulatory support initiatives, we believe its share price already reflects the improving earnings trajectory. We would turn more constructive if consensus earnings move materially higher, or if the share price corrects meaningfully,” RHB said.