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A weaker showing in the derivatives business sent third-quarter earnings sliding at bourse operator Singapore Exchange (SGX).Net profit dropped 6.8 percent to $83.1 million for the three months to March 31, compared with the $89.2 million racked up in the same period a year earlier.

SGX said in a statement yesterday that its net profit would have been $87 million if a one-off loss of $4 million from the disposal of its investment in the Bombay Stock Exchange was excluded. This is still 2 per cent lower than the earnings figure posted last year.

Operating revenue dipped 1.5 percent to $202.7 million, while operating profit was little changed, inching up 0.3 per cent to $102.9 million.Equities and fixed income comprising issuer services, securities trading, and clearing, and post-trade services – made up 51 percent of total revenue.

Within this, turnover from issuer services climbed 2 percent to $19 million, helped largely by a 10 percent increase in listing revenue to $12.6 million backed by a higher number of new bond listings.

There were 189 bond listings raising $101.2 billion during the quarter, compared with 78 listings raising $38 billion previously.Revenue from securities trading and clearing inched up 1 percent to $55.3 million. SGX said its securities daily average traded value increased 1 percent to $1.24 billion, while total traded value grew 5 percent to $78.3 billion and total traded volume swelled 59 percent to 156 billion shares.

The higher level of trading activity was due to continue positive momentum following the US presidential election, it said.Meanwhile, turnover from derivatives, which contributed to 37 percent of total revenue, dropped 9 per cent to $75.2 million, dragged down by a 13 percent decrease in equity and commodities turnover as volumes fell 18 per cent.

Sales from market data and connectivity, which accounted for 12 percent of overall revenue, rose 13 percent to $24.4 million.

Expenses slid 3 percent to $99.7 million due to lower volume-related processing and royalties, and professional fees. Earnings per share shrank 7 percent to 7.8 cents, compared with 8.3 cents previously. Net asset value per share was 88.1 cents as at March 31, down from 92.5 cents as at June 30 last year.

Net profit came in at $254.5 million for the nine months, 6.5 percent lower than the same period the year earlier, while operating revenue was down by 4.3 percent at $593.1 million.

SGX has proposed a quarterly dividend of five cents per share, unchanged from the same quarter last year. In the past quarter, we saw continued momentum in the equities market following the US presidential election, with increased participation seen from both retail and institutional customers, said chief executive Loh Boon Chye.

While sentiments have improved, positive outcomes on US economic policies will be important to sustain trading activities.SGX said operating expenses this year are expected to be between $405 million and $415 million, while technology-related capital expenditure is likely to be between $65 million and $70 million.

SGX shares closed three cents or 0.4 per cent lower at $7.45 before the results were announced.

Today’s Update is on the SGX Stock Market. To know about the all live market updates and its positions for BUY/SELL, Subscribe the 3 Days free Trial here: MMFSolutions.SG

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