SGX's 16.9% derivatives volume surge was a one-off event: analyst

Expect a more gradual improvement.

According to Phillip Securities, SGX will be announcing its 2Q13 results on 22 Jan 2013. Based on monthly statistics recently released by SGX, 2Q13’s SDAV decreased 9.0% q-q to S$1.214 billion, due to the few large transactions in 1Q13. DDAV surged in 2Q13, increasing 16.9% q-q to 0.359 million contracts.

Here's more from Phillip Securities:

We expect Securities Revenue to decrease q-q due to the lower SDAV. Derivatives revenue is however expected to increase due largely to the 75% q-q increase in FTSE China A50 Index Futures volume to 3.97 million contracts, and smaller but significant q-q increase in Nikkei 225 Index Futures and Options to 6.96 and 1.63 million contracts respectively.

Looking ahead, we expect SDAV to increase from the low base, due to a possible increase in attractive IPOs in 2013, and potential further market stimulus encouraging trading activities.

With a wide range of attractive offerings, we expect the volume of Derivative contracts to continue increasing. However, the q-q increase of 16.9% in Derivatives volume may not be repeated. A more gradual increase is expected.