SINGAPORE : Rising interest in derivatives trading helped lift earnings for the Singapore Exchange (SGX) last quarter.
Asia's second-largest bourse operator reported a 17 per cent on-year rise in second-quarter net profit to S$76 million.
It also attracted a large number of new bond listings in the same quarter.
Derivatives trading has been the star performer in SGX.
Over the October to December quarter, derivatives daily average volume on SGX hit a record of 358,532 contracts, up 30 per cent on-year.
This was supported by rising trading interests in China A50 futures and Japan Nikkei 225 options.
Not to be undone, the securities market performed well too.
Its daily average volume rose 8 per cent for the quarter to hit a trading value of S$1.2 billion.
This translates to a revenue of S$58 million for the securities business segment.
SGX said the better performance was due to improvements in investor sentiment following stability over the Europe debt situation and improved US economy.
Magnus Bocker, chief executive officer of Singapore Exchange, said: "We should remember the enormous amount of liquidity in the market. Not so much in the equity market, but actually more in the fixed income and currency markets, and with chasing yields and lot of very successful and growing companies, I think we can all expect this sentiment to continue. I think we can expect more flows into securities."
Some analysts are bullish on SGX's prospects going forward.
The said the improved investment climate globally may benefit the exchange operator.
Ken Ang, investment analyst at Phillip Securities Research, said: "SGX is very well placed to benefit from this increasing attractiveness of the equity market and therefore resulting in increase in trading value."
SGX attracted eight new listings in its second quarter - raising S$798.9 million.
While the number seems small, it came amid declines in the global initial public offering (IPO) market.
In 2012, global IPO volumes fell 27 per cent, with the lowest level of funds raised since 2009.
Kenneth Ng, head of Singapore research at CIMB Research, said: "I think while that (derivative) is great and that diversified the revenue of SGX, SGX still has a rather pertinent problem of trying to increase the security turnover velocity and value by retail initiatives, attracting listings and so forth."
Apart from seeking more IPOs, SGX also attracted some 90 new bond listings, raising S$39.7 billion for the quarter.
- CNA/ms
SGX's Q2 net profit rises 17% to S$76m
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SGX's Q2 net profit rises 17% to S$76m
