Operating revenue: Up 42% QoQ; down 1% YoY. Securities market fees were up 80% QoQ and 10% YoY as average daily traded value jumped 82% QoQ, to S$1.7bn. Derivative fees increased 15% QoQ, down 14% YoY, with an 18% QoQ rise in traded contracts, a tad disappointing and due to lower structured warrants activity. Stable revenue was up 5% QoQ, down 14% YoY with higher corporate actions. Market-driven revenue was 79% of total mix (vs. 72% in 3Q09).
Operating expenses: Up 18% QoQ; down 4% YoY. Bonus accruals were up 152% QoQ (4Q seasonality), down 17% YoY. Good cost controls in staff costs, marketing and travel expenses offset increased system investments, with system maintenance and depreciation costs both increasing. Improved markets led to a 7ppt QoQ fall in operating efficiency, to 38%.
Back to Bull: SGX is rational with shareholder capital, in our view, and continues to seek to expand the proposition and diversify revenue streams. The announcement of the new CEO removed an uncertainty. With global monetary policy conditions likely to remain loose for some time, we expect liquidity to continue to expand and flow into risky assets and also increase corporate activity. SGX is a leveraged play on this thematic, and we see average daily traded value reaching and holding the S$2-2.5bn range. Trading on 22x FY10e EPS, SGX appears very reasonable compared with HKEx at 38x.
Sponsored Links
No comments:
Post a Comment