SGX's total revenue seen to fall 10% to $182m

As analyst predicts a softer 1QFY14.

According to DBS, it estimates total revenues to drop by 10% to S$182m, expenses to remain stable at S$81m, and net profit of S$84m for the quarter. Base DPS of 4 S cts is expected to be declared, similar to previous quarters.

Here's more from DBS:

Daily average trading volumes have remained high (3Q13: 3.6bn) amid the strong market activity for small cap stocks during the quarter.

The value-tovolume ratio has dropped further to S$0.37 compared to S$0.54 the previous quarter.

As a result, average trading value for 3QCY13 declined 18% q-o-q to S$1.3bn (2Q13: S$1.6bn). On a positive note, the proportion of capped trades (> S$1.5m) has declined to 35% (2Q13: 41%), providing support to average trading value.

Derivatives remain SGX’s distinguishing factor.
Compared to HKEX and Bursa, SGX generates a higher proportion of its revenue from derivatives - 29% as at 2Q13 (Bursa: 16%, HKEX: 20%).

This has helped SGX keep revenues strong. Derivative activities for SGX have been picking up strongly over the past 4 quarters.

However, we expect a slight softening this quarter as derivative volumes declined by 17% q-o-q, largely from the Nikkei 225 Index Futures. Although open interest rose 3% q-o-q, we do not believe this will be sufficient to offset the volume decline.