SINGAPORE (Oct 20): Singapore Exchange (SGX) reported 1Q19 earnings of $91.1 million, 0.4% higher than the 1Q18 earnings of $90.7 million reported a year ago.

Earnings per share remained unchanged from a year ago at 8.5 cents.

Operating profit for 1Q19 was $106.4 million compared to $106.0 million.

Revenue for 1Q19 came in 2.2% higher at $208.9 million compared to $204.5 million a year ago.

Derivatives revenue rose 21% to $97.7 million, contributing to 47% of total revenue.

Equities and Fixed Income declined 13% to $86.4 million, accounting for 41% of total revenue.

Issuer Services revenue decreased 12% to $19.5 million, contributing to 9% of total revenue.

SGX registered a total of six new equity listings which raised $0.2 billion, while secondary equity funds raised amounted to $1.1 billion.

Securities Trading and Clearing revenue decreased 8% to $46.9 million and accounted for 22% of total revenue.

Securities daily average traded value (SDAV) declined 8% to $1.07 billion from S$1.16 billion, with total traded value dipping 8% to $67.5 billion.

There were 63 trading days this quarter, the same as a year ago. Overall turnover velocity for the quarter was 36%.

Expenses increased by 4% to $102.5 million, mainly due to higher staff costs and professional fees. Average headcount for the quarter was 815. Technology expenses increased 3% to $31.4 million, mainly due to higher system maintenance costs from the implementation of new systems.

In line with previous guidance, operating expenses for FY19 are expected to be between $445 million and $455 million. Technology-related capital expenditure is expected to be between $60 million and $65 million.

Loh Boon Chye, CEO of SGX, says, “We achieved strong record revenues in our derivatives business, while our securities market saw a pullback along with other regional stock markets, amid heightened volatility and emerging market weakness. During the quarter, we made
strategic investments in companies that will enable us to expand our fixed income business and pursue the development of our digital marketplace for freight.”

Looking ahead, Loh says the continued market volatility will increase the demand for risk management and investment solutions.

“Our expanded MSCI Net Total Return index futures suite is gaining traction and will continue to deliver results, together with our broad range of Asian derivative products and recently developed FlexC FX futures,” he adds.

The board of directors has declared an interim dividend of 7.5 cents per share, payable on Nov 5.

Year to date, shares in SGX are down 7.2% to close at $6.93 on Friday.