According to a Reuters reports, The Baltic Exchange, a hub for global shipping market, has held talks with several potential buyers, including Singapore Exchange Limited (SGX). Meanwhile, the SGX has released an official statement that it has submitted a non-binding bid for the acquisition of The Baltic Exchange, but stressed that talks are still at the preliminary stage. This deal could complement SGX’s current Derivatives business, especially freight derivatives. As discussions are still in the early stages, we will not be revising our earnings projections.

Since our last report in Jan 2016, the stock has gained as much as 10% to a recent high of S$7.30 last week before easing off to S$7.01 yesterday, still up some 5.4%. Our fair value estimate for the stock is S$7.01. We will turn buyers closer to the S$6.70 level.

Source: OCBC Research - 26 Feb 2016