UOB Kay Hian analyst Llelleythan Tan has kept his “hold” recommendation on Singapore Exchange (SGX) as he sees the exchange as “fully valued” at its current price levels with no major potential upside.
In his report dated March 30, Tan says he remains cautious on the impact on SGX’s earnings from the competition from the Hong Kong Exchange (HKEX) and sliding securities daily turnover value (SDAV).
“We think significant revenue from new initiatives such as SGX’s FX ETC network and Special Purpose Acquisition Company/Companies would take time to gestate and major success from these initiatives could re-rate SGX to trade similar to peers’ average (28.6x),” he writes.
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