SGX Sees Q3 FY2016 Revenues Rise, Led By Derivatives Business

SGX's Q3 FY2016 metrics were generally upbeat, with key components of its business propping up revenues and profits.

The Singapore Exchange (SGX) has released its Q3 FY2016 metrics, which showed tepid signs of growth over the previous year, largely clinging to a tight consolidation across key figures, according to an SGX statement.

For Q3 FY2016, SGX reported a revenue of $205.8 million, good for a rise of 3.3% YoY from $199.3 million back in Q3 2015. The increases in revenue over the past year have come during a recent uptrend in volumes at the venue, having risen substantially in recent months.

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Moving to profits, SGX yielded a net profit of $89.2 million in Q3 FY2016, reflective of a marginal growth of 1.1% YoY from $88.2 million in Q3 2015. Operating profits in Q3 FY2016 also failed to orchestrate any significant departure from its 2015 counterpart, revealing $103.0 million, unchanged YoY.

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Key Specifics and Outlook

Despite an overall growth in revenues during Q3 2016 at SGX, a number of its services showed mixed figures. In particular, revenue from Issuer Services incurred a decline of -5.0% YoY to $18.7 million in Q3 2016, down from $19.7 million in Q3 2015 – by extension, listing revenue was also down a by a factor of -6.0% YoY to $11.4 million in Q3 2016 from $12.1 million in the year prior.

One of the bright spots of SGX’s business was across its Securities Trading and Clearing revenue in Q3 2016, which increased to $54.8 million, up 4.0% YoY from $52.8 million in Q3 2015 – this segment accounted for 27% of SGX’s total revenue.

However, the largest component of SGX’s business was derivatives revenue (40%), which swelled to $82.2 million in Q3 2016, up nearly 3.0% YoY from $79.7 million in Q3 2015. By an identical margin, revenues across SGX’s equities and commodities business also grew in Q3 2016, disclosing a figure of $61.9 million.

According to Loh Boon Chye, Chief Executive Officer (CEO) CEO of SGX in a recent statement on the metrics: “Our results this quarter showed growth across our three business lines of Equities and Fixed Income, Derivatives and Market Data and Connectivity. This reflected higher levels of market activities as market participants react and adjust to the changes in benchmark interest rates and volatile commodity prices.”

“As we continue to execute on our growth strategy, we will focus on managing costs, against the backdrop of increasing competition and volatile global market conditions. We expect FY2016 operating expenses to come in at the lower end of our previously announced guidance of between $415 million and $425 million,” added Mr. Boon Chye in an accompanying statement on the SGX’s outlook.

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