SGX(US:SPXCY)2022-02-04 19:31Financial Data and Key Metrics Changes - Group revenue for the first half of FY 2022 was $522 million, comparable to the previous year, but underlying business revenue increased by 6% when excluding treasury income [2][3] - Group total expenses rose by 6% to $262 million, with underlying expenses increasing by 5% when excluding two subsidiaries [3][9] - Group NPAT (Net Profit After Tax) decreased by 9% to $219 million, while adjusted earnings fell by 3% to $222 million [3][18] Business Line Data and Key Metrics Changes - FICC (Fixed Income, Currencies, and Commodities) revenue increased by $15 million, now contributing 22% to group revenue, up 3 percentage points from a year ago [5] - Equity derivatives revenue rose by 19% to $132 million, while cash equities revenue declined due to weaker trading activity, with SDAV (Securities Daily Average Value) down 7% to just under $1.2 billion [7][8] - FX revenue saw a 46% increase in average daily value (ADV) to USD 57 billion, with exchange-traded currency futures volumes up by 6% [6][51] Market Data and Key Metrics Changes - The average clearing fee for equity, currency, and commodity derivatives increased by 19% to 150 [7] - The iron ore futures volume was up 17%, and freight volume surged by 90%, with market share increasing by 12 percentage points to over 17% [5][44] - The SGX FTSE China A50 contract remains the most liquid China futures contract, with open interest growing by more than 10% between October and December 2021 [36][38] Company Strategy and Development Direction - The company is focused on executing a multi-asset strategy, investing in growth, and expanding its addressable market through acquisitions and partnerships [2][22] - Recent acquisitions, including Scientific Beta, BidFX, and MaxxTrader, are aimed at enhancing technology and knowledge transfer, as well as expanding customer base [22][23] - The company plans to broaden its product offerings, including new thematic ETFs and access to emerging markets [31][41] Management's Comments on Operating Environment and Future Outlook - Management expects treasury income to recover as interest rates rise, although a lag effect is anticipated [13][99] - The company is optimistic about the growth of the offshore market and the potential for increased liquidity as market liberalization occurs in China [72] - Management highlighted the importance of maintaining a strong cash flow to support dividends and investments, with a focus on organic growth in key areas [94][96] Other Important Information - The Board declared a quarterly dividend of $0.08 per share, maintaining the total dividends for the first half of FY 2022 at $0.16 per share [26] - The company has made investments of about $1 billion over the last two years, leading to increased leverage levels but maintaining a healthy interest coverage ratio [21] Q&A Session Summary Question: Interest from Chinese homecoming companies listing on SGX - Management noted ongoing discussions and highlighted Singapore's neutral venue as an opportunity for attracting listings from Chinese companies [66] Question: Market share expectations for Hong Kong Exchange A50 futures - Management emphasized the importance of overall market growth and noted that SGX's open interest has grown by 10% [68][72] Question: Operational timeline for NSC Gift City Connect - Management indicated that the launch is expected this year, with ongoing regulatory discussions [74][77] Question: Revenue and expense contributions from recent acquisitions - Combined revenue from the two subsidiaries increased by 20% year-on-year, while expenses rose by 15%, indicating positive revenue growth [78] Question: Revenue implications from SPAC listings - Management stated that listing fees for SPACs are similar to regular IPOs, ranging from SGD 100,000 to 200,000, with additional revenue expected from business combinations [84][82]