Singapore Exchange (SGX)

Singapore Exchange (SGX) demonstrated robust performance in 1HFY6/25, reporting a core net profit of S\$320 million. This represents a 17% half-on-half growth and a 28% year-on-year increase, outperforming both internal and Bloomberg consensus estimates. Elevated cash equities and equity derivatives volumes were the primary drivers behind SGX’s impressive 15.6% revenue growth year-on-year. The company also saw a modest rise in operating expenses, up just 3% year-on-year, reflecting disciplined cost control.

SGX declared an interim dividend of 9 Singapore cents for 2QFY6/25, up from 8.5 cents in the same quarter of the previous year. Notably, average cash equities net clearing fees increased by 5% year-on-year to 2.57 basis points, supported by higher turnover velocity of primary-listed stocks, which reached 40% in 1H25 compared to 34% in 1H24.

The equity derivatives segment also experienced growth, driven by increased volumes of FTSE China A50 and GIFT Nifty 50 contracts. Treasury income linked to the equity derivatives segment remained stable, bolstered by strong open interest levels. Additionally, the currencies and commodities segment grew by 14% year-on-year, led by higher trading volumes in over-the-counter FX, currency derivatives (notably INR/USD and USD/CNH FX futures), and commodity derivatives like iron ore.

Despite the strong performance in the first half, the outlook for 2H25F presents potential challenges, including tapering macroeconomic tailwinds and a more muted U.S. Federal Reserve rate cut outlook. The report reiterates a “Hold” recommendation for SGX, with a revised target price of S\$13.20, up from S\$12.50, reflecting tighter cost controls, elevated clearing fees, and sustained treasury income. Risks include potential declines in treasury income due to interest rate cuts and the possibility of underwhelming market revitalization initiatives.

Bursa Malaysia

Bursa Malaysia is rated as “Add” with a target price of RM11.30. The stock’s performance has been relatively stable, with a forecasted core P/E of 21.8x for FY25 and 21.0x for FY26. Its projected three-year EPS compound annual growth rate (CAGR) stands at 1.7%, reflecting a steady, albeit modest, growth trajectory.

Key metrics for Bursa Malaysia include a high recurring return on equity (ROE) of 35.3% for FY25 and 35.7% for FY26, placing it in a strong position compared to peers. The company’s dividend yield is forecasted at 4.3% for FY25 and 4.5% for FY26, making it an attractive option for income-focused investors. Its EV/EBITDA is notably low at 6.4x and 6.2x for FY25 and FY26, respectively, reflecting a cost-efficient operational model.

Hong Kong Exchanges & Clearing

Hong Kong Exchanges & Clearing (HKEX) is not rated in the report, but its financial metrics indicate strong performance. The company is forecasted to achieve a core P/E of 29.0x for FY25 and 27.7x for FY26, reflecting investor confidence in its long-term growth potential. Its recurring ROE is projected at 25.0% and 25.4% for FY25 and FY26, respectively.

HKEX’s EV/EBITDA ratios are relatively low at 4.8x for FY25 and 4.6x for FY26, while its dividend yield is estimated at 3.0% and 3.2% over the same period. These figures underscore its strong financial health and ability to generate shareholder value.

Nasdaq Inc.

Nasdaq Inc. is also unrated in the report but is highlighted for its impressive three-year EPS CAGR of 28.0%, showcasing its rapid growth trajectory. Its core P/E is forecasted at 26.3x for FY25 and 22.9x for FY26, demonstrating a high valuation supported by strong earnings growth.

Nasdaq’s recurring ROE is slightly lower compared to other exchanges, at 15.0% for FY25 and 16.3% for FY26. Its EV/EBITDA is forecasted at 19.6x for FY25 and 17.8x for FY26, reflecting its premium valuation. The dividend yield is estimated at 1.3% for FY25 and 1.4% for FY26, suggesting a focus on reinvestment for growth rather than dividend payouts.

Deutsche Boerse AG

Deutsche Boerse AG is another unrated entity in the report. The company’s core P/E is forecasted at 21.4x for FY25 and 20.0x for FY26, indicating a stable valuation. Its recurring ROE is projected at 17.6% for FY25 and 17.0% for FY26, reflecting consistent profitability.

Deutsche Boerse’s EV/EBITDA is forecasted at 14.6x for FY25 and 13.7x for FY26, showcasing its operational efficiency. Its dividend yield is expected to be 1.8% for FY25 and 1.9% for FY26, offering moderate income potential for investors.

CME Group Inc.

CME Group Inc. is another prominent exchange covered in the report without a specific rating. Its core P/E is forecasted at 23.3x for FY25 and 22.1x for FY26, reflecting its strong market position. Although the company’s recurring ROE is lower at 13.4% for FY25 and 14.0% for FY26, it remains a solid performer in its category.

CME Group’s EV/EBITDA is forecasted at 19.3x for FY25 and 18.4x for FY26, indicating a premium valuation. Its dividend yield is robust at 3.6% for both FY25 and FY26, making it an appealing choice for income-focused investors.