Is SGX worth S$10.32 a share?

Singapore Exchange (SGX) saw total securities market turnover value fall by 9% year-on-year in April 2021. What is the outlook on the stock?

  • Singapore Exchange Ltd (SGX: S68) begins the week slightly higher at S$10.35
  • The bourse operator reported its April 2021 market statistics, in which total securities market turnover value slid 9% year-on-year
  • The Straits Times Index, which tracks the 30 largest SGX-listed stocks, rose 1.7% across the month
  • Analysts’ latest price targets show that SGX’s stocks currently trade at a fair value
  • Buy and sell SGX shares with an IG account

SGX share price: What’s the update?

Singapore Exchange (SGX) shares opened slightly higher on Monday (10 May 2021), after the release of its April 2021 market statistics.

The blue-chip counter is up 5.7% so far this year. Analyst sentiments published by SGX StockFacts show a consensus rating of ‘neutral’ alongside a 12-month price target of S$10.32 on the stock.

Total securities market turnover value on SGX slid 9% year-on-year in April to S$27 billion, while securities daily average value (SDAV) was also 9% lower at S$1.3 billion.

SGX-listed companies also continued to tap the equity capital markets with secondary fundraising totalling S$1.3 billion in April, the highest amount since October 2020, the exchange further noted.

The bellwether Straits Times Index (STI) rose 1.7% in April to 3,218.27 – climbing for a sixth straight month – with dividends boosting the total return for the month to 2%.

Over the first four months of 2021, the benchmark has generated a 14% total return. In terms of price gains, that was the STI’s strongest start to a calendar year since 1999.

Risk-management demand ‘stays robust’ across equities, forex, commodities

Despite the decline, the bourse operator said that ‘demand to manage portfolio risk across multiple asset classes stayed robust, even as manufacturing activity in key Asian markets improved, cooling price volatility in equities’.

Derivatives traded volume on SGX rose 5% year-on-year in April to 17.5 million contracts.

SGX’s suite of pan-Asia benchmark equity derivatives climbed to 12.3 million, led by an 11% increase in SGX FTSE China A50 Index Futures trading volume to 6.7 million.

SGX Nifty 50 Index Futures grew 8% to 2.1 million contracts, while SGX MSCI Singapore Index Futures were up 17% at one million.

Total FX traded volume on SGX rose 30% from April 2020 to 2.2 million contracts, with SGX USD/SGD Futures reaching a single-day record high of 10,521 contracts on 30 April.

SGX INR/USD Futures jumped 38% to 1.4 million even as a secondary market government security acquisition programme announced by the Reserve Bank of India fueled a decline in volatility.

Meanwhile, SGX USD/CNH Futures volume gained 13% to 766,980 contracts amid investor concern over the outlook for China-US relations.

Total commodity volume on SGX climbed 25% year-on-year for the month to 2.2 million contracts.

This was led by iron ore derivatives, up 19% to 1.8million, thanks to record physical iron ore prices which bolstered demand to manage risk via options contracts.

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