BUY
Price S$7.41
Previous S$8.90
Target S$8.90
SGX announced that its securities market will trade continuously all day from 1 Aug. This will mean a greater overlap with those of other Asian exchanges, which will enable investors trading pan-Asian securities to better respond to regional market movements and news flow. Continuous all-day trading will also enhance Singapore’s competitiveness as an international financial centre.
We remain bullish on SGX given its various initiatives to stimulate trading. Besides continuous all-day trading, SGX is also reducing the securities market minimum bid size, effective 4 Jul 2011 – SGX estimates S$1.7b in annual savings for investors. Effective 8 Jul 2011, Singapore government bonds can also be traded on SGX, which is expected to improve price transparency and liquidity in SGS bonds.
Whilst recent securities market average daily turnover (ADT) numbers are weak, with Jun 11 ADT of S$1.24b (versus Jan-Mar 2011 ADT of S$1.71b), we believe these new initiatives could drive ADT higher as we move into FY12 (SGX yearend is Jun). We maintain BUY on SGX with a target price of S$8.90, which is pegged to 22x FY13 EPS, on our assumed FY13 ADT of S$2.02b.
No comments:
Post a Comment