SGX share price opens lower despite higher third quarter earnings

Share price of Singapore Exchange (SGX) fell over 8% within the first 30 minutes of trading on Friday 24 April 2020.

Singapore Exchange (SGX) has reported a 38% growth in net profit for the third quarter of its 2020 financial year, on the back of higher trading volume amid volatile market conditions.

Net profit for the quarter came in at S$137.5 million – a 13-year high, versus S$99.7 million a year prior, with revenues of S$295.8 million – up 29% from a year prior.

EBITDA stood at S$186.2 million for Q3 of 2020 (up from S$134.2 million a year prior), while earnings per share was S$0.128 cents (up from S$0.93 in Q3 FY2019). The Board of Directors has also declared a dividend of S$0.75 cents per share (unchanged from a year ago), payable on 13 May 2020.

Following the financial results announcement, share price of SGX fell 8.4% within the first 30 minutes of trading on Friday 24 April 2020, based on IG trading data.

IG is a world-leading online trading and investments provider for thousands of financial markets. With CFDs, you can buy long or sell short on SGX shares depending on whether you think prices will rise or fall. Start today by opening an IG account.

SGX saw surge in trading volume in Q3 FY2020

Revenue and trading volume increased across all market segments in the latest quarterly report.

Fixed Income, Currencies and Commodities Business (FICC) revenue increased S$8.5 million or 23% to S$45.5 million from S$37.0 million a year ago, accounting for 15% of total revenue.

Fixed Income revenue rose by 24% year-on-year to S$4.0 million, while Currencies and Commodities – Derivatives revenue increased 23% year-on-year to S$41.5 million (S$33.7 million).

Equities revenue, which comprises Equities – Cash as well as Equities – Derivatives revenues, rose 31% to S$217.3 million (versus Q3 2019’s S$165.7 million), accounting for 73% of total revenue.

Equities – Cash revenue increased 38% to S$111.3 million (up from S$80.4 million in Q3 2019), accounting for 38% (up from 35% in Q3 2019) of total revenue. Equities – Derivatives revenue increased 24% to S$106.0 million (S$85.3 million).

In terms of volume, Currencies and Commodities gained 39% to 14.9 million this quarter, versus 10.7 million in Q3 of 2019.

Equities Cash saw a surge of 48% year-on-year in trading volume this quarter, while Equity Derivatives trading volume grew 24% to 61.5 million in Q3 of 2020, versus 49.5 million a year prior.

Are you bullish or bearish on Singapore Exchange (SGX) shares? Either way, you can buy long or sell short on SGX shares and other Singapore stocks using CFDs and other instruments offered on IG's world-leading trading platform. Start today by opening an IG account.

SGX raises FY2020 operating expense guidance by S$20 million

Loh Boon Chye, Chief Executive Officer of SGX, said in a statement that activity from US and European clients trading outside of Asian trading hours has grown to 20% of total derivatives volumes as a result of the heightened market volatility.

‘With uncertainty around the eventual economic and financial impact of COVID-19 and path to recovery, these elevated levels of volatility are likely to be prolonged,’ said Loh.

He added that from FY2021 (01 July 2020) onwards, SGX will adopt half-yearly financial reporting, with dividends continued to be paid on a quarterly basis.

Finally, in view of the higher market activity and other company changes – including the launch of a S$5 million Covid-19 care package, SGX has revised its initial FY2020 operating expense guidance of between S$465 million and S$475 million higher to between S$485 million and S$495 million.

Read also: SGX share price hits 10-year high as trading volume surges

How to trade Singapore stocks with IG

Looking to trade SGX shares and other Singapore Blue Chip Index stocks? Open a live or demo account with IG and buy (long) or sell (short) the asset using derivatives like CFDs in a few easy steps:

  1. Create an IG Trading Account or log in to your existing account
  2. Enter <company name> or <ticket code> in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

React to global volatility

Market volatility continues as coronavirus concerns amplify. Trade with IG and take advantage of:

  • Tight spreads – from just 1 point on major indices, and 2.8 on US crude
  • Guaranteed stops – they’re free to use, and only incur a fee when triggered
  • Round-the-clock assistance – our highly skilled team are available when you need support

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.