SGX's brighter outlook tempered by competition

SINGAPORE Exchange's (SGX) latest quarterly results and guidance by management suggest brighter days ahead, but the competitive landscape continues to present challenges for the market operator.

SGX posted reasonably positive results for its second fiscal quarter. Net profit rose 5.5 per cent to S$88.3 million for the three months ended December 2016, the exchange's best year-on-year gain in five quarters. That increase broke a two-quarter streak of profit declines, and came on the back of increased volatility and market activity following the election of US President Donald Trump, and despite acquisition-related costs related to SGX's roughly S$140 million takeover of the Baltic Exchange in November 2016.

With the Straits Times Index already up 5.6 per cent year to date and north of 3,000, the gloom that has plagued market sentiment since the 2013 penny stock crash appears to have lifted somewhat.