Singapore Exchange

Buy

Target price: $8.90

Jan 22 close: $8.35

Broker: DBS Group Research, Jan 22

We reiterate our positive view on Singapore Exchange (SGX) given improved sentiment on the market, and higher volumes for both equities and derivatives businesses. We expect SGX's earnings to grow by 4 to 11 per cent going forward, after a relatively weak FY 2017. SGX's continued efforts to drive market liquidity and new product initiatives should bear fruit in the coming years.

We are more positive on the Singapore market activity for both securities and derivatives. Our earnings forecasts are more bullish than consensus by 3 to 6 per cent across FY18-20 forecast on stronger revenue assumptions driven by improved market activity.

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