Singapore Exchange Limited – Cash equities drive a record year August 17, 2026 7

PSR Recommendation: NEUTRAL Status: Downgraded
Last Close Price: 24.97 Target Price: 25.00
  • 2HFY26 revenue and earnings met our estimates, with FY26 at 102%/101% of our forecasts. 2H26 adjusted earnings rose 39% YoY, driven by: 1) cash equities revenue up 40% YoY on higher securities daily average value; 2) FICC revenue up 21% YoY on record FY26 currency and commodity derivatives volumes in INR/USD, USD/CNH and iron ore; and 3) SGX FX ADV up 33% in FY26 on client expansion into EMEA and the Americas. A one-off 12.5-cent dividend from the Trading Technologies gain took FY26 DPS to 57.0 cents (+52% YoY).
    2H26 equity derivatives trading and clearing revenue inched up 2.5% YoY, and the FY26 average net fee per contract fell 7% to S$1.20. Management attributed this to SGD strength and a higher mix of clients on volume tiers and does not expect it to persist. Equity derivatives have fallen behind FICC, becoming the third-largest segment. SGX guided FY27e expense growth of 6-8% (prev. 4-6%) and capex of ~S$100mn (prev. S$90-95mn), with medium-term revenue growth unchanged at 6-8% ex-treasury.
  • Downgrade to NEUTRAL with a higher target price of S$25.00 (prev. S$18.30). We raise our FY27e estimates by 11% due to higher FICC and equities revenue and lower OPEX. Our target price is pegged to +2SD of its 5-year mean, or 33x P/E FY27e (Figure 1), up from 28x P/E. We like SGX for the shift towards cash equities, a better business than derivatives as it is priced on value traded rather than per contract, so revenue rises with the market, and a third comes from post-trade fees on holdings rather than turnover. The ~50 IPO pipeline and the third EQDP tranche should support SDAV into FY27e. However, SGX trades at 38.6x FY26 P/E versus a 5-year mean of ~22x, and FY27e DPS falls to 48.5 cents once the one-off drops out. At this valuation, a record SDAV is priced in as the new baseline, and FY26’s growth came with volatility and retail participation at a five-year high.

 

 

 

 

 

 

 

 

 

 

 

The Positives
+ Cash equities delivered 59% of 2H26 revenue growth. 2H26 revenue rose 40% YoY to
S$282mn, S$80mn of the S$135mn group increase. Cash equities revenue is now nearly 1.5x
equity derivatives, up from 1.1x a year ago. Settlement and depository revenue rose 46% YoY,
driven by higher-yielding subsequent settlement transactions. FY26 SDAV rose 35% to S$1.8bn,
the highest in 18 years, while the average net clearing fee held at 2.61bps; growth came from
higher volumes, not higher fees. Retail participation hit a five-year high and 21 new listings
raised S$4.1bn (FY25: six listings raised S$25.7mn).

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About the author

Profile photo of Glenn Thum

Glenn Thum
Research Analyst
PSR

Glenn covers the Banking and Finance sector. He has had 3 years of experience as a Credit Analyst in a Bank, where he prepared credit proposals by conducting consistent critical analysis on the business, market, country and financial information. Glenn graduated with a Bachelor of Business Management from the University of Queensland with a double major in International Business and Human Resources.

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