Here are a few good reasons to invest in SGX
By Gwyneth Yeo / theedgemarkets.com.sg | January 17, 2017 : 10:48 AM
SINGAPORE (Jan 17): DBS Group Research believes the worst is nearly over for the Singapore economy, given the signs of a recovery in loan growth after a year of contraction as well as the manufacturing sector’s growing purchasing manager’s index (PMI).
That means an upturn is in sight, which bodes well for the Singapore Exchange.
SGX has already started seeing an improvement in its numbers, with turnover value increasing 10%, reversing from the two previous quarters of decline. At the same time, trading volumes had risen 23%.
Derivatives have also started to stabilise from two quarters of declines and DBS analysts Ling Lee Keng and Lim Sue Lin expect the segment to be SGX’s main growth driver while the bourse attempts to improve liquidity in its securities segment.
“Boosting liquidity is one of the key priorities,” note Ling and Lim. “We believe these priorities would lead to an increase in market participants and drive market activity higher. SGX is also working on the regulatory front to further enhance the corporate governance of SGX.”
SGX shares are also trading at 20 times forward earnings, which is a discount to its peers like Bursa Malaysia and the Hong Kong Stock Exchange who are trading at 22 times and 33 times forward earnings respectively.
As such, the brokerage has upgraded SGX from a “hold” rating to a “buy” rating, with a higher target from $7.60 to $8.30.
Shares in SGX are trading 2 cents higher at $7.46.
By Gwyneth Yeo / theedgemarkets.com.sg | January 17, 2017 : 10:48 AM
SINGAPORE (Jan 17): DBS Group Research believes the worst is nearly over for the Singapore economy, given the signs of a recovery in loan growth after a year of contraction as well as the manufacturing sector’s growing purchasing manager’s index (PMI).
That means an upturn is in sight, which bodes well for the Singapore Exchange.
SGX has already started seeing an improvement in its numbers, with turnover value increasing 10%, reversing from the two previous quarters of decline. At the same time, trading volumes had risen 23%.
Derivatives have also started to stabilise from two quarters of declines and DBS analysts Ling Lee Keng and Lim Sue Lin expect the segment to be SGX’s main growth driver while the bourse attempts to improve liquidity in its securities segment.
“Boosting liquidity is one of the key priorities,” note Ling and Lim. “We believe these priorities would lead to an increase in market participants and drive market activity higher. SGX is also working on the regulatory front to further enhance the corporate governance of SGX.”
SGX shares are also trading at 20 times forward earnings, which is a discount to its peers like Bursa Malaysia and the Hong Kong Stock Exchange who are trading at 22 times and 33 times forward earnings respectively.
As such, the brokerage has upgraded SGX from a “hold” rating to a “buy” rating, with a higher target from $7.60 to $8.30.
Shares in SGX are trading 2 cents higher at $7.46.
