SGX posted 1QFY17 revenue of S$191m, down 13% YoY, giving net profits of S$83m, down 16% YoY. This captured the slower activities as Securities Trading and Clearing revenue fell 16% YoY to S$47.1m or 25% of total revenue this quarter. Similarly, securities daily average traded value (SDAV) was 19% lower at S$0.99b versus S$1.23b in the same quarter last year. Total traded value fell 17% YoY to S$62.2b.

Derivatives revenue fell 22% YoY to S$70.8m and accounted for 37% of total revenue. Interim dividend of 5 cents was declared and unchanged from last year. SGX is expecting full year FY2017 operating expenses to be between S$420m and S$430m, and technology-related capital expenditure to be between S$65m and $70m. As its 1Q results were largely within expectations, we are maintaining our HOLD rating and fair value estimate of S$7.36.

Source: OCBC Research - 20 Oct 2016