SGX's net earnings fell 22.4% to $75.8m

Blame it on weak securities revenue.

According to OCBC Investment Research, Singapore Exchange reported 3QFY14 results which came in within our expectations. Operating revenue fell 13.1% YoY but inched up 0.6% QoQ to S$165.6m, while net earnings dipped 22.4% YoY but rose 1.1% QoQ to S$75.8m.

The YoY decline was driven largely by lacklustre Securities revenue (-32.1% to S$52.3m) as the daily average traded value slumped 37% to S$1.1b.

Here's more:

Although SGX’s Derivatives revenue slipped slightly by 1.5% YoY to S$52.3m, there was an encouraging 10% growth in contract volumes if we exclude Nikkei 225 futures and options, which had a very strong 3QFY13. Another key highlight during 3QFY14 was SGX’s announcement of a series of initiatives to improve the quality and liquidity of the securities market. 

For 9MFY14, operating revenue was almost flat at S$514.2m (+0.3%), forming 71.5% of our full-year forecast. Net earnings of S$243.0m represented a decline of 2.1% and constituted 72.3% of our FY14 projection. We are expecting a better 4Q ahead. An interim dividend of 4 S cents/share was declared, similar to 3QFY13, and brings 9MFY14 declared dividends to 12 S cents/share.

Looking ahead, SGX expects its FY14 operating expenses to come in around S$310-315m, an improvement from its previous S$320-330m guidance. It also intends to expand its distribution network and product offerings, which includes introducing RMB futures in 1QFY15 (subject to regulatory approvals).