The Positives
+ Treasury income continues to climb. 1H24 total treasury income on collateral balances held in trust surged 47% YoY to S$67mn from 1H23’s treasury income of S$47mn. The increase was mainly due to higher average yields on margin deposits, partially offset by a decrease in margin balances. However, this was lower than the record high of S$90mn reached in 2H23. Notably, 1H24’s treasury income contributed 20% to PBT, similar to the contribution in full-year FY23.
+ FICC – Currency and commodities surges. FICC – Currency and commodities trading and clearing revenue surged 30% YoY to S$148mn in 1H24, as volumes increased in commodity and currency derivatives, primarily from iron ore futures (up 49% YoY in 1H24) and USD/CNH FX futures; as well as higher contribution from OTC FX. SGX’s OTC FX business average daily volume spiked 46% YoY to US$100.1bn, on target to reach SGX’s FY25 target of US$100bn, and contributed S$40.9mn, or 7%, to 1H24 revenue. The increase was primarily due to higher volumes in currency swaps from clients managing interest rate risks.
+ Platform and Others revenue rose 8% YoY. Platform and Others revenue accounted for 20.3% (1H23: 19.5%) of total revenue and grew 8% YoY to S$120mn in 1H24. Market data revenue rose 10% YoY, driven by higher revenue realised from Securities and Derivatives Market Direct Feed subscribers, as well as growth in distribution of Commodities data, while connectivity revenue grew 9% YoY, mainly due to higher revenue from co-location subscribers. Indices and other revenue increased 7% YoY mainly from higher revenue contribution from Energy Market Company and Indices.
The Negatives
– Listing revenue continues decline. FICC – Fixed Income revenue fell 8% YoY in 1H24, dragged down by lower listing revenue. There were 489 bond listings raising S$132bn in 1H24 (2H22: 449 bond listings raised S$104bn). On Cash equities, revenue was 6% lower YoY in 1H24 mainly due to listing revenue declining 3% YoY and trading and clearing revenue falling 14% YoY as daily average traded value, total traded value, and overall average clearing fees fell. Overall, equities revenue accounted for 54% (1H23: 60%) of revenue and fell 6% YoY to S$320mn in 1H24.
– Derivatives volume and fees dip. Total equity derivatives volumes dipped 14% YoY in 1H24, as volumes of GIFT Nifty and FTSE China A50 index futures contracts declined. The average fee per contract for Equity, Currency, and Commodity derivatives was lower at $1.54 in 1H24 (1H23: $1.58) mainly driven by a decline in the average fee of Nifty 50 index futures, due to the reclassification of National Stock Exchange of India fee arrangement from expense to revenue as part of GIFT Connect. Nonetheless, on a pro forma basis, the 1H24 average fee per contract rose slightly to $1.54 (1H23: $1.53).
Source: Phillip Capital Research - 5 Feb 2024
Created by traderhub8 | Jun 12, 2024
Created by traderhub8 | Jun 03, 2024