Is SGX Singapore Exchange A Buy?

🌟🌟🌟I am so happy that Singapore Exchange $SGX(S68.SI)$  is on an upward momentum this week with its share price up 1.7% on Friday and 10.1% for the past 5 days.  SGX has risen 30% year todate and in 2023 it is up 33.5%.  That is a fantastic performance considering that the Singapore Market does not move as quickly as the US market.

Singapore Exchange is Singapore one and only stock exchange which operates a platform for the buying and selling of securities such as shares, Reits, bonds, derivatives and ETFs.

On August 8, SGX announced a strong set of earnings for its fiscal 2024 (FY2024) ending 30 June 2024.  Revenue increased by 3.1% year on year to SGD 1.2 billion while net profit rose 4.7% year on year to SGD 597.5 million.

Earnings per share (EPS) was 55.9 cents.    The Board of Directors has proposed a final quarterly dividend of 9 cents, an increase of  0. 5 cents per share payable on 25 October 2024.

According to CEO Loh Boon Chye, revenue growth in FY2024 was led by strong volumes in SGX currencies and commodities businesses as it expands its customer base and drove higher activity.  SGX currencies and commodities franchises are on a healthy growth momentum with volumes doubling over the last 3 years.

SGX Equities businesses showed stronger activity in the 2nd half of the financial year.  Equity derivatives daily average volume and securities daily average value have increased 11% and 21% respectively.

SGX Fixed Income, Currencies and Commodities (FICC) segment has delivered more than 20% CAGR in the last 3 years.  Commodities daily average volume grew 50% to about 240,000 contracts in FY 2024.  This was driven by broadening participation in iron ore futures contracts during the overnight T+1 session.

SGX OTC FX average daily volume well surpassed SGX target with a 47% increase to reach USD 111 billion in FY 2024.  SGX currency futures Daily Average Volume grew 36% to about 204,000 contracts.  OTC FX business is projected to contribute mid to high single digit of Group EBITDA in the medium term.

SGX has also recently introduced 5 Hong Kong SDRs, following the 8 Thai SDRs that were launched earlier.  

SGX is currently working closely with the Review Group set up by MAS to recommend measures to strengthen the Equities market development in Singapore. 

Analysts are bullish on SGX with a Buy rating, Target Price ranging from SGD 14.31 to SGD 10.41.

I like SGX as it has a wide moat being the only stock exchange in Singapore.  As a dividend seeker, I love SGX dividends which are paid every 3 months.  The current dividend yield is 2.75%.

I have invested in SGX since 2022 and have been dollar cost averaging into this Singapore blue chip stock.  I believe that SGX will continue to grow slow and steadily into the future in tandem with the growth of Singapore as a dynamic important  financial centre of South East Asia.     

Go Long Go Strong Go SGX! 🚀🚀🚀🌛🌛🌛🌈🌈🌈💰💰💰🇸🇬🇸🇬🇸🇬

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