Latest news with #SGXGroup
Straits Times
3 days ago
- Business
- Straits Times
S'pore retail investors to get expert tips on Reits as the asset class comes back into play
The programme is supported by SGX Group, Reit Association of Singapore and the Securities Association of Singapore. PHOTO: LIANHE ZAOBAO S'pore retail investors to get expert tips on Reits as the asset class comes back into play SINGAPORE – Retail investors can get expert tips on real estate investment trusts as the market for Reits in Singapore heats up with falling interest rates and fresh listings on the horizon. Research analysts, trading representatives and Reit managers will hold 10 sessions under a newly launched educational series on the asset class aimed at enabling retail investors to better understand and assess the risks involved before putting their money into Reits. More than 300 investors, brokers and investment professionals will get to visit Reit properties and understand the assets that they invest in under the six-month programme, which is organised by the Securities Investors Association (Singapore), or Sias. Mr David Gerald, president of Sias, said on May 24: 'Going beyond reading annual reports or attending webinars, investors will now walk through the actual assets, engage the managers, ask questions and understand the fundamentals as part of investor education. Investors will need to understand and assess the risks involved as well when investing in Reits.' The programme is supported by SGX Group, Reit Association of Singapore and the Securities Association of Singapore. Head of equities at SGX Group Ng Yao Loong said SGX sees a healthy Reit IPO pipeline, particularly in emerging sub-sectors like data centres, purpose-built living spaces and logistics assets. Speaking at a Reits symposium on May 24, he noted that the Singapore bourse has emerged as the third-largest Reit listing venue globally by fund-raising, after China and India, in the last five years, adding that SGX is making efforts to ensure that Singapore remains the listing venue of choice for Reits globally. Japan's Nippon Telegraph and Telephone in its earnings release in May said it plans to list its data centre Reit on the SGX in the future. Singapore's Centurion said in a January filing that it is exploring the establishment of a Reit involving some of its workers and student accommodation assets. If the plan materialises, the Reit will be listed on the mainboard of the SGX. Mr Ng also introduced InvestSG, a platform where Reit investors can find sector insights, research, community discussions, market data and model portfolios on Reits, enabling smarter investment portfolio decisions. The platform is slated to be launched in the later part of 2025. Reits are funds that invest in a portfolio of income-generating real estate assets such as shopping malls, offices and hotels. They often take on some debt to buy assets and are subject to an overcall cap on gearing in Singapore. Similar to stocks, Reits are listed on stock exchanges, allowing investors to buy and sell units. With interest rates trending downwards, Reits are expected to benefit in 2025 as borrowing costs decline and investor appetite for income-generating assets grows. RHB Bank analyst Vijay Natarajan in a May 20 report noted that most of the 15 Singapore Reits, or S-Reits, under the bank's coverage reported in-line results for the first quarter, driven by softer interest cost pressures. He said the sharp fall in domestic rates is benefiting the S-Reits, with the majority of them reporting lower overall interest costs. The fall in benchmark rates has also resulted in lower yields for alternative options such as deposit rates, T-bills and Singapore savings bonds, and rising yield spreads for S-Reits – potentially creating room for fund inflows to the sector if the tariff overhang is removed, he added. Mr Ng said Reits stand out as an alternative asset class in times of market volatility, as they exhibit a lower correlation with macro uncertainties as compared to equities and other asset classes. 'As a sector, it is currently trading at a cyclically low valuation of 0.8 time P/B (price-to-book), or around a 20 per cent discount, while offering a forward dividend yield of around 6 per cent,' he said. A P/B ratio of 0.8 time for Reits indicates that the market price of the Reit is 80 per cent of its book value, suggesting that the Reit is trading at a discount to its underlying asset value. He added that Reits not only offer passive rental income, but also exposure to trends such as return-to-office mandates, the rise of artificial intelligence, and evolving consumption patterns. Mr Natarajan of RHB Bank said the direct impact of US tariff policies have been minimal on S-Reits so far, and favours the industrial, office, healthcare, and suburban retail sectors. Hospitality remains his least preferred sector. UOB Kay Hian analyst Jonathan Koh added that several S-Reits, including Frasers Centrepoint Trust, Keppel Reit and CapitaLand Integrated Commercial Trust, reported positive rental reversion, or a positive change in rental rates. 'Singapore is a safe haven due to fiscal discipline and its lowest reciprocal tariff of 10 per cent,' he said. He noted that a favourable rate environment, with a 10-year government bond yield of 2.6 per cent and a three-month compounded Singapore Overnight Rate Average, or Sora, at 2.3 per cent, has helped to boost the attractiveness of Reits, which are now offering yields of 6-7 per cent. Join ST's WhatsApp Channel and get the latest news and must-reads.
Business Times
5 days ago
- Business
- Business Times
Iron ore stays relevant despite China's faltering property sector as demand drivers evolve
[SINGAPORE] Iron ore, the backbone of China's steel-fueled boom for more than two decades, is facing a pivotal demand shift. The ferrous metal's fortunes are now decoupling from the country's property sector to hinge more on infrastructure projects and high-tech machinery demand, a shift reflecting broader economic trends in China, Tan Tee Yong, head of commodity derivatives of SGX Group, told The Business Times. The demand for iron ore, as a crucial raw material in steel production, will be supported by China's growing emphasis on 'electrification, digitalisation and greenification – sectors that are inherently steel and iron ore-intensive', he added. In China, the infrastructure sector will overtake property to be the biggest end-user sector for steel in 2025, based on a report by S&P Global Commodity Insights, raising forecasts for infrastructure consumption for both 2025 and 2026 to 234 million tonnes and 227 million tonnes, respectively. Paul Bartholomew, senior analyst of metals and mining research of S&P Global, highlighted that the Chinese government has announced plans to improve the country's water infrastructure, while its infrastructure investment remained steady in the March quarter, government data indicated. On the other hand, steel consumption in the property sector is expected to fall 8 per cent in 2025, an improvement from an almost 12 per cent year-on-year decline in 2024, said Bartholomew. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Beyond China While China's demand for steel – which is estimated to drop 2 per cent on the year by S&P Global Commodity Insights – is slowing, market watchers have seen rising demand for steel and subsequently iron ore, its primary raw material, elsewhere in the world. 'Beyond China, urbanisation and industrialisation continue to drive demand for iron ore globally,' said SGX's Tan, adding that regions such as Asean and India, in particular, are emerging as key growth markets for the ferrous metal. S&P Global's Bartholomew noted that India, which is adding at least another 30 million tonnes per year of steel capacity over the next five years, is still in steel production growth mode. Facilities in the Middle East and Europe under construction, accounting for about 50 million tonnes of direct reduced iron in the respective region, will also require high-grade iron ore. 'So while China is inevitably slowing, there will be growing demand for iron ore from other regions,' as reflected by the massive investment in the Simandou high grade iron ore project in Guinea, noted S&P Global's Bartholomew. Unexpected portfolio diversifier For institutional investors, iron ore could be more relevant as an unexpected diversifier in a balanced portfolio of 50-50 stocks and bonds, indicated a report released by S&P Dow Jones Indices in collaboration with SGX Group on Tuesday (May 27). Iron ore, proxied by the S&P GSCI Iron Ore index, was found to improve the risk-adjusted returns of the balanced portfolio. Sharpe ratios, with its higher values indicating the more attractive risk-adjusted returns, would be improved by 7 per cent to 19 per cent, with optimal weight of iron ore ranging from 4 per to 9 per cent, said the report. Among the four commodities studied – iron ore, gold, crude oil and copper – iron ore is the only one that provided an increase in potential return while reducing the strategy's volatility, for weighting up to 5 per cent. 'Beyond the 5 per cent weighting, iron ore continued to provide increased return, albeit also introducing higher volatility. Other commodities by contrast, offered a reduction in volatility at the expense of some return,' said the report. The report also found that iron ore's historical edge also came from persistent backwardation, where near-term prices topped futures, allowing investors holding contracts over time to profit by rolling contracts at lower prices. This positive roll-yield, rare in commodities, amplified returns for a long-holder even with small allocations, while cushioning volatility. Prices for iron ore, which soared nearly tenfold during China's construction frenzy, are now under pressure from a prolonged property slump and the economy's tilt towards services. BMI expects iron ore prices to be weighed down by a subdued demand outlook, while remaining supported by renewed optimism over easing trade tensions. In a report released on May 15, the team maintained its 2025 iron ore price forecast at an annual average of US$100 per tonne, a 3.6 per cent year-on-year decrease from estimated 2024 average price of US$103.7 per tonne.
Business Times
13-05-2025
- Business
- Business Times
SGX securities daily average volume in April hits 5-year high
[SINGAPORE] The total securities market turnover value on the Singapore Exchange (SGX) increased 59 per cent to S$40.6 billion in April, on record foreign exchange (FX) futures and exchange-traded fund (ETF) activity. April's total market turnover volume fell 21 per cent to 29.5 billion shares, from 37.1 billion in the same month the previous year, said the bourse operator in its monthly market statistics report on Tuesday (May 13). The securities daily average value (SDAV) reached a new five-year high in April, rising 59 per cent on year to S$1.9 billion – the highest since March 2020. Derivatives traded volume increased 24 per cent year on year to 29.9 million contracts on record foreign exchange (FX) futures activity, too. Month on month, it was up around 9 per cent from 27.4 million contracts in March. This was largely due to a 'flight to quality' activity by investors amid tariff volatility, SGX said. The derivatives daily average volume climbed 24 per cent on year to 1.5 million contracts. 'In a month of tariff-driven volatility, global investors leaned on SGX Group's liquid marketplace to tap opportunities and risk-manage across asset classes,' it added. US President Donald Trump unveiled tariffs on trading partners on Apr 2, and eventually hiked those on China to 145 per cent, with retaliatory rates of 125 per cent. Singapore, on the other hand, was subject to a baseline 10 per cent tariff rate, which came into effect on Apr 5. In particular, SGX US dollar/offshore Chinese renminbi FX futures traded volume gained 57 per cent year on year in April to 4.4 million contracts as investors weighed US-China trade tensions. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Additionally, SGX Indian rupee/US dollar FX futures volume also grew on the back of renewed foreign-investment flows into India bolstering the domestic economy. The two benchmark contracts led a 70 per cent year-on-year surge in total SGX FX futures volume to a record high of 8.2 million contracts. Next, the combined assets under management of ETFs rose to a record S$13.8 billion in April, with daily average turnover up 62 per cent year on year at S$37.5 million – a five-year high. SGX witnessed the listing of Amova MSCI AC Asia ex Japan ex China Index ETF in April, the first ETF globally that tracks the MSCI AC Asia ex Japan ex China Index. In April, Singapore was the most-traded South-east Asian cash market, leading regional peers with 2025 year-to-date SDAV growth of 22 per cent. The Straits Times Index also outperformed other South-east Asian benchmarks year to date with a 1.2 per cent price return and 2.9 per cent total return for the month. Retail SDAV in particular climbed more than 50 per cent month on month to the highest level achieved since January 2021. In the top position, DBS made up 19 per cent of total trading value of STI constituent stocks for the month of April, with a market capitalisation of around S$120.6 million. This was followed by UOB at 10 per cent, recording a market capitalisation of around S$57.9 million. Both OCBC's and national telco provider Singtel's total trading value of STI constituent stocks stood at 9 per cent. India equity derivatives recorded its best performance in April, where Gift Nifty 50 Futures hit a record volume of 2.1 million contracts, up from two million contracts the previous month. Its daily average volume of 112,113 contracts in April demonstrated strong trading momentum, with India outperforming its emerging market peers amid the tariff uncertainty. Meanwhile, the traded volume of SGX FTSE China A50 Index Futures stood out last month, increasing 32 per cent year on year in April to 9.4 million contracts, with 1.2 million lots changing hands on Apr 7. This was at the peak of the global sell-off triggered by concerns over the impact of US tariffs. Broad-based commodities also grew, with the commodity derivatives traded volume increasing 11 per cent on year in April to 6.3 million contracts, with iron ore leading the gains across other products. The volume of SGX Sicom rubber derivatives – its global physical benchmark for rubber future contracts – increased 49 per cent on year to a record of more than 454,000 lots, while petrochemicals volume more than doubled, driven by heightened risk management. Due to increased options activity, dairy derivatives increased to a record of more than 170,000 lots, too. Institutional investors also turned to SGX Equity Derivatives to manage their Asian portfolio risk during onshore holidays in China and Taiwan and to hedge their positions during US hours. A record 85,270 lots of SGX FTSE Taiwan Index Futures were traded during the overnight session of Apr 9. As at 1.46 pm, shares of SGX were trading 2.4 per cent or S$0.34 lower at S$14.06.
Yahoo
06-02-2025
- Business
- Yahoo
SGX posts 27.3% higher adjusted net profit for 1HFY2025 with higher revenue in all four segments
For the six months ended Dec 31, 2024, SGX's cash equities net revenue rose 22.3% y-o-y to $192.6 million and accounted for 29.8% of total net revenue. Singapore Exchange (SGX Group) has posted adjusted net profit of $320.1 million for 1HFY2025 ended Dec 31, 2024, up 27.3% y-o-y; while adjusted ebitda was up 23.9% y-o-y at $426.9 million. Adjusted earnings per share was 29.9 cents, up from 23.5 cents this time last year. Adjusted ebitda, net profit and earnings per share exclude 'certain non-cash and non-recurring items that have less bearing on SGX Group's operating performance', says the bourse operator on Feb 6. 'Hence, they better reflect the group's underlying performance.' Without the adjustments, ebitda would have risen 23.4% y-o-y to $425.3 million; while net profit would have risen 20.7% y-o-y to $340 million; and earnings per share would have come in at a higher 31.8 cents for 1HFY2025. After deducting transaction-based expenses, net revenue increased 15.6% y-o-y to $646.4 million, with growth in all business segments. This figure includes associated treasury income, which grew $1.4 million y-o-y. SGX's board of directors has declared an interim quarterly dividend of 9.0 cents per share, up from 8.5 cents this time last year and unchanged h-o-h. This is payable on Feb 21. This brings total dividends in 1HFY2025 to 18.0 cents per share. SGX reports revenue across four segments: fixed income, currencies and commodities (FICC), cash equities, equity derivatives and platform and others. Revenue from SGX's FICC segment increased 13.4% y-o-y to $159.1 million and accounted for 24.6% of total net revenue in 1HFY2025. Fixed income net revenue increased 22.8% y-o-y to $4.8 million. There were 395 bond listings raising $145.6 billion during the six-month period, compared to 489 bond listings raising $131.7 billion a year earlier. Meanwhile, currencies and commodities net revenue increased 13.1% y-o-y to $154.3 million. The increase in trading and clearing revenue was mainly from higher volumes in OTC FX, currency derivatives and commodity derivatives, says SGX. OTC FX net revenue increased 35.7% y-o-y to $55.0 million. OTC FX headline average daily volume (ADV) increased 35.4% y-o-y to US$136 billion. Currency derivatives volumes increased 43.2% y-o-y to 33.0 million contracts, mainly due to higher volumes in INR/USD and USD/CNH FX futures contracts. Commodity derivatives volumes increased 14.5% y-o-y to 32.9 million contracts, mainly due to higher volumes in iron ore derivatives, says SGX. SGX's cash equities net revenue rose 22.3% y-o-y to $192.6 million and accounted for 29.8% of total net revenue. SGX recorded five new equity listings during the six-month period, which raised $19.7 million. This is down from four new equity listings that raised $19 million in 1HFY2024. Secondary equity funds raised were $3.1 billion, up from $0.6 billion this time last year. Securities daily average traded value (SDAV) increased 31.2% y-o-y to $1.3 billion and total securities traded value increased 34.4% y-o-y to $162.8 billion. This was made up of cash equities, where traded value increased by 35.3% y-o-y to $156.9 billion; and other products, where traded value increased 12.8% y-o-y to $5.9 billion. There were 129 trading days in 1HFY2025, up from 126 this time last year. Equity derivatives net revenue increased by 21.6% y-o-y to $177.4 million and accounted for 27.4% of total net revenue. An 18.8% y-o-y increase in trading and clearing revenue was mainly driven by a 17.4% y-o-y increase in total equity derivatives volumes. Higher volumes of FTSE China A50, GIFT Nifty 50, MSCI Singapore and FTSE Taiwan index futures contracts were partially offset by lower volumes of Nikkei 225 index futures contracts, says SGX. The average net fee per contract for equity, currency and commodity derivatives was comparable at $1.30, flat from $1.31 this time last year. Finally, SGX's platform and others segment saw 1.7% higher net revenue in 1HFY2025, accounting for 18.1% of total net revenue. Market data revenue rose 3.8% y-o-y to $25.1 million, connectivity revenue rose 8.7% y-o-y o $41.8 million, indices and other revenue fell 3.7% y-o-y to $55.3 million; and transaction-based expenses rose 4.3% y-o-y to $5.0 million. Total expenses were comparable at $263.1 million in 1HFY2025, largely flat from $262.8 million this time last year. Higher variable staff costs were mainly offset by lower depreciation and amortisation and fixed staff costs, says SGX. Adjusted total expenses are comparable at $257.3 million, from $256.4 million in 1HFY2024, excluding amortisation of purchased intangible assets and other one-off adjustments. SGX's total capital expenditure was $22.1 million in 1HFY2025, up 19.5% y-o-y. 'These investments include the modernisation of our technology infrastructure. We expect our expenses and capital expenditure to be at the lower end of our FY2025 guidance, previously guided at a 2%-4% increase and between $70 million to $75 million respectively,' says SGX. Loh Boon Chye, CEO of SGX Group, says: 'We started the fiscal year strong with our highest half-year revenue and net profit since listing. Cash equities and equity derivatives led our broad-based performance, followed by currencies and commodities, with notable growth in our OTC FX business now contributing 5% of the group's ebitda.' Loh says SGX saw rising global demand for its derivatives suite, increased trading across products and higher activity during US and European hours. 'Trading in our cash equities market grew alongside the introduction of more investment options for investors. While there could be some moderation of macro tailwinds in the near term, we are focused on growing our businesses and remain optimistic about our medium-term outlook.' SGX will hold an earnings call later this morning. Shares in SGX closed 10 cents higher, or 0.81% up, at $12.43 on Feb 5. Its shares have risen 33% over the past year. Table: SGX Group 5 cents interim DPS Read more stories about where the money flows, and analysis of the biggest market stories from Singapore and around the World Get in-depth insights from our expert contributors, and dive into financial and economic trends Follow the market issue situation with our daily updates Or want more Lifestyle and Passion stories? Click here
Bloomberg
06-02-2025
- Business
- Bloomberg
SGX Says It Remains Optimistic For Medium-Term
SGX Group President Michael Syn expects some of the first-half macro tailwinds to potentially moderate, and he remains optimistic for the medium-term. He speaks with Haslinda Amin and Avril Hong on "Insight with Haslinda Amin." (Source: Bloomberg)
