SGX warned of downside risks despite posting highest revenue: analyst

In the current fiscal year, the bourse posted $1.099b revenue.

There could be risks for Singapore Exchange (SGX) despite its highest revenue registered since its listing, with $1.099b in June 2022 results, higher by 4% year-on-year.

RHB said downside risks include higher-than-guided operating costs next year and slower revenue contributions from acquisitions.

“[SGX] results did not yield any major surprises. Management is guiding for a 7% to 9% increase in expenses and higher-than-normal capex for fiscal year 2023,” it said in a brokerage report.

RHB also pointed out that whilst the bourse’s derivatives daily average volume will be higher, next year’s securities daily average value (SDAV) will still be muted.

On the upside, SGX’s possible gains will include higher-than-estimated SDAV from exchange traded funds, REITs, and special purpose acquisition company listings.