- Globally, derivative volumes have been growing at CAGR of 10% in the past 5 years.
- FTSE China A50 Index Futures remain the main driver of SGX’s volume, accounting for 44% of total trading volume in FY2019.
- Diversification efforts have seen derivative volumes from non-equity - FX futures and Iron ore -grow from virtually non-existent in FY2014 to 15% of total volumes in FY2019.
- HKEX’s launch of MSCI China A-share futures contract yet to be approved.
- SGX and NSE to ends arbitration, and launch IFSC-SGX Connect in GIFT City by end FY2020.
- We maintain ACCUMULATE at a higher TP of S$8.60 (previously S$8.07). We peg our TP to 22x P/E, 0.5 SD below SGX’s 5-year mean (previously 21x). The higher TP is due to an upward adjustment in our FY20-21 DDAV forecast by +2% and +4% respectively.