SGX Q3 profit at 10-yr high, focus on new India equity derivatives in June

Singapore Exchange Ltd (SGX) reported its highest profit in a decade on Friday as a strong performance in derivatives and securities powered a 21 percent rise in net profit for the quarter to March 31.

Third-quarter profit of S$100.5 million ($76.5 million) on revenue up 10 percent to a record S$222.2 million.

"Our marketing efforts, together with longer trading hours enabled by our new derivatives trading and clearing platform, added to an increase in global participation across products and trading sessions," CEO Loh Boon Chye said.

"With improved global growth, more central banks are likely to adopt tightening measures. This could lead to investors rebalancing their portfolios," Loh told analysts and reporters. "As a result, we expect market activity to improve."

New India products

Market focus is also on how SGX can cope with an unexpected move by India's three main bourses to stop licensing their indexes and securities to foreign bourses from August. Worried by the potential decline in business, analysts have cut SGX's earnings estimates for the next few years.

SGX says it will list launch successor products to its flagship Indian equity derivative products in June, ahead of the expiry of its licence agreement with India's National Stock Exchange in August.

Loh said the settlement prices for these products would be based on publicly available futures prices. SGX doesn't expect the discontinuation of its current derivatives products to have any immediate impact on its financial performance.

SGX's Nifty 50 index futures, the exchange's main Indian equity derivatives product, accounted for 11 percent of its total derivatives trading volume in the latest quarter.

Over the past two decades, SGX has become the most popular way for foreign investors to bet on Indian equity indexes, with Nifty futures tracking India's National Stock Exchange main index.

SGX, a global listing hub for real estate investment trusts and business trusts, is also launching dual-class shares this year.

Exchanges are stepping up efforts to attract listings, with Hong Kong Exchanges and Clearing set to announce dual-class shares and biotech listing rules next week.