SGX’s net profit dropped 16% in Q1 as trading values plunge

Low volatility is also a key culprit.

Singapore Exchange yesterday reported first-quarter net profit of $78 million, down 16% year-on-year, and a revenue of $169 million, 8% lower year on year.

Securities market activities continued to be challenged by low volatility of 6% at the end of the quarter. Daily average traded value of stocks priced below $0.20 declined 66% or $0.1 billion during the quarter compared with a year earlier.

Securities daily average traded value and total traded value decreased 27% and 26% to $1.0 billion and $63.0 billion respectively.

Derivatives volumes were up 9% to 28.8 million contracts. A50 futures trading more than doubled to 10.8 million contracts due to growing investor interest in the China A-share market ahead of the launch of the Shanghai-Hong Kong Stock Connect.

A total of 13 new listings occurred on SGX, raising $1.9 billion, compared to 11 new listings raising $2.0 billion a year earlier. Secondary equity funds raised increased 70% to $4.4 billion. Our bond listing platform continued to draw strong interest; 131 new bonds were listed, raising $52.8 billion, higher than the 98 listings raising $38.8 billion a year earlier.

“Our securities market continued to be challenging, primarily due to low volatility which more than halved to 6% from 14% a year earlier. The outlook for both the domestic and global markets remains uncertain amid recent turbulence. Against this backdrop, the business environment is challenging. Volumes in the Japan Nikkei 225 contract decreased following a decline in the overall market and migration of volumes to Japan,” said Magnus Bocker, CEO of SGX.