SGX Stocks and Warrants
SGX - 3Q Net Profit +16% YoY
Warrants Highlight
SGX - 3Q Net Profit +16% YoY
| Code | Name | Type | Expiry | Exercise Price |
| P9HW | SGX MB eCW120904 | Call | 04-Sep-12 | 6.50 |
| P2BW | SGX MB eCW120802 | Call | 02-Aug-12 | 7.50 |
| MG8W | SGX MB eCW130103 | Call | 03-Jan-13 | 11.50 |
SGX reported its 3Q12 earnings after market yesterday. Its 3Q net profit rose 16% year-on-year (YoY) to $77.8mn. This is in line with Macquarie Equities Research (MER) estimate and 1% above consensus. CEO Mr Magnus Bocker attributed the gains to improved Securities and Derivatives activities and continued cost discipline.
Well-balanced top-line growth.
The QoQ rebound in securities revenue was largely driven by 1) higher turnover velocity among the Singapore stocks and; 2) stronger retail participation mix leading to higher margin and higher clearing fees. In addition to better-than-expected contract volumes, derivatives also benefited from higher collateral-related income as a result of 46%YoY growth in open-interest positions.
Cost-discipline remains a core focus.
Operating expenses fell 6% YoY and was 3% below MER’s forecast. Staff costs rose 2%YoY on higher headcount and variable compensation. However, this was more than offset by lower project-related expenses and a couple of one-off recovery items such as GST.
Maintain Outperform
MER likes SGX management's prudent cost management and persistent diversification into non-market related income streams. MER thinks that the IT spending should remain subdued as the rush for securities high frequency trading (HFT) services has slowed pending a regulatory and implementation structure. SGX offers an extremely solid balance sheet with cash of $506m (31% of total assets), zero debt, and a dividend yield of 4%.
Singapore Market Wrap
The 1% rollercoaster ride on the STI
Opening at an intra-day high of 2,996, the STI dived one percent in the late afternoon but quickly changed its mind, rebounding to close down just 0.2% day-on-day (dod) at 2,986.59 yesterday.
June Call STI 3000MBeCW120629 (P8BW) exercise level 3,000.*
June Put STI 2900MBePW120629 (P8CW) exercise level 2,900.*
Longer dated Call STI 3100MBeCW130131@ (PA7W) exercise level 3,100.*
Longer dated Put STI 2800MBePW130131@ (PA8W) exercise level 2,800.*
SGX announces better than expected earnings
Yesterday, the exchange bourse SGX announced their 3Q12 earnings which came in at $78mn a 16 increase from the previous year and ahead of consensus - Bloomberg poll of analysts had estimated a net profit of $76.6mn. The higher bottom line was spurred by higher securities revenue which showed a higher increase from the previous quarter. SGX announced a third interim dividend of four cents. Its share price outperformed the benchmark STI yesterday, closing up 0.3% dod at $6.72.
Call SGX MB eCW120904 (P9HW) exercise price $6.50.*
Call SGX MB eCW120802 (P2BW) exercise price $7.50.*
Overnight Market Wrap
IMF Raised Growth Forecast
Both European and US indices rallied yesterday. The Spanish government managed to sell more than its targeted amount of debt despite a spike of bond yields recently. Crude oil prices rose 1.2% to $104.20 per barrel.
The International Monetary Fund raised its 2012 global outlook forecast from 3.3% to 3.5%. It also raised US growth forecast from 1.8% to 2.1%. The organisation noted that the global economy is slowly improving again but it is still very fragile.
Overnight Markets
| Indices | Last | Change |
|---|---|---|
| STI | 2986.59 |
-0.2%  |
| HSI | 20562.31 |
-0.2% |
| DJIA | 13115.54 |
1.5%  |
| S&P 500 | 1390.78 |
1.6% |
| Nasdaq | 3042.82 |
1.8% |
Corporate News
Corporate Announcements
SGX announced a 3Q12 net profit of $77.8mn, a 16% from the previous year. The company announced a third interim dividend of four cents.
Results Announcement
Thu 19 Apr: Keppel Corp 1Q12
Fri 27 Apr: DBS 1Q12
Mon 30 Apr: CapitaLand 1Q12, IndoFood 1Q12
Wed 9 May: UOB 1Q12, SembMarine 1Q12
Ex-Dividend Date
Wed 25 Apr: Keppel Corp ($0.26), SembMarine ($0.20)
Wed 26 Apr: STX OSV ($0.10)
Fri 27 Apr: OCBC ($0.15)
Mon 30 Apr: Cosco ($0.03), Golden Agri ($0.0184), SGX ($0.04)
Fri 4 May: Wilmar ($0.031), IndoFood Agri ($0.003)
Mon 7 May: UOB ($0.40), CapitaLand ($0.08)
Wed 9 May: DBS ($0.28)
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
