Singapore Exchange (SGX): A Steady Growth Trajectory
Singapore Exchange (SGX) delivered a robust performance in 1HFY6/25, exceeding expectations with a core net profit of S\$320 million. This represented a 17% half-on-half (hoh) and 28% year-on-year (yoy) growth. The group’s revenue surged by 16% yoy, driven by elevated cash equities and equity derivatives volumes alongside stable treasury income. Operating expenses were tightly controlled, increasing by only 3% yoy.
SGX declared an interim DPS of 9 Singapore cents for 2QFY6/25, up from 8.5 Singapore cents in 2QFY6/24. Average daily trading volumes for cash equities (SDAV) rose to S\$1.3 billion in 1H25 from S\$1 billion in 1H24, while equity derivatives daily average volumes (DAV) increased by 16% to 728,000 contracts. The currencies and commodities segment also showed a strong 14% yoy growth.
While SGX maintains its medium-term revenue growth target of 6-8%, expectations around revitalizing the Singapore equities market remain high. However, the report notes that unconvincing initiatives could result in a retraction of SGX’s recent re-rating. A softening of macro tailwinds and a muted outlook on US Fed rate cuts may lead to softer trading volumes in 2H25, although risk management demand could provide upside potential.
Recommendation: Hold, with a target price (TP) raised to S\$13.20 from S\$12.50, reflecting disciplined cost control, stronger clearing fees, and sustained treasury income. Downside risks include treasury income declines due to interest rate cuts.
Bursa Malaysia: Modest Upside Potential
Bursa Malaysia Bhd is highlighted for its steady performance and modest growth prospects. With a current price of RM8.26 and a target price of RM11.30, the stock is expected to deliver a total return exceeding 10% over the next 12 months.
The company demonstrates resilience with a core P/E of 21.8x for CY2025F, marginally improving to 21.0x for CY2026F. It boasts a strong ROE of 35.3% for CY2025F, which is expected to rise to 35.7% in CY2026F. Bursa also offers an attractive dividend yield of 4.3% for CY2025F and 4.5% for CY2026F.
The report attributes Bursa Malaysia’s stability to its strong governance framework and its ability to maintain consistent profitability despite macroeconomic challenges.
Recommendation: Add, with an anticipated robust dividend payout and steady market presence.
Hong Kong Exchanges & Clearing: High Valuation with Growth Potential
Hong Kong Exchanges & Clearing (HKEX) is noted for its significant market capitalization of US\$50.3 billion. The stock trades at a forward P/E of 29.0x for CY2025F, declining to 27.7x for CY2026F. Despite the high valuation, HKEX demonstrates stable ROE levels of 25.0% and 25.4% for CY2025F and CY2026F, respectively.
HKEX’s revenue growth is driven by its diversified offerings, including equities, derivatives, and commodities. The company’s dividend yield is projected at 3.0% for CY2025F, improving slightly to 3.2% for CY2026F.
While the report does not assign a specific recommendation, HKEX is highlighted as a strong competitor in the Asian financial markets.
Nasdaq Inc.: A Growth-Focused Player
Nasdaq Inc. stands out for its aggressive growth trajectory, with a projected 3-year EPS CAGR of 28.0%. The stock trades at a P/E of 26.3x for CY2025F, improving to 22.9x for CY2026F. However, Nasdaq’s ROE remains relatively modest at 15.0% and 16.3% for CY2025F and CY2026F, respectively.
The report notes Nasdaq’s focus on expanding its technological and data-driven solutions, which have helped it capture a larger share of the global financial services market. Its dividend yield is modest at 1.3% for CY2025F and 1.4% for CY2026F, reflecting its reinvestment strategy for growth.
Recommendation: Not rated, but the company shows strong growth potential through technological advancements.
Deutsche Boerse AG: Stability in the European Market
Deutsche Boerse AG is a key player in the European financial markets, with a market capitalization of US\$46.6 billion. The stock trades at a P/E of 21.4x for CY2025F, improving to 20.0x for CY2026F. ROE is stable at 17.6% for CY2025F and 17.0% for CY2026F.
Deutsche Boerse offers a dividend yield of 1.8% for CY2025F, improving slightly to 1.9% for CY2026F. The report highlights the company’s diversified revenue streams, including derivatives, clearing, and market data services, as key drivers of its consistent performance.
Recommendation: Not rated, but the company is noted for its stability and diversified revenue structure.
CME Group Inc.: A Leader in Derivatives
CME Group Inc. is recognized as a global leader in derivatives trading, with a market capitalization of US\$87.1 billion. The stock trades at a P/E of 23.3x for CY2025F, slightly improving to 22.1x for CY2026F. CME’s ROE is relatively lower at 13.4% for CY2025F and 14.0% for CY2026F.
The company offers a dividend yield of 3.6% for both CY2025F and CY2026F, underlining its commitment to returning value to shareholders. CME’s growth is bolstered by its focus on innovative financial instruments and expanding its global reach.
Recommendation: Not rated, but CME remains a strong player in the derivatives market.
Conclusion
The report by CGS International provides a comprehensive analysis of major players in the financial markets, emphasizing their strengths, growth prospects, and challenges. Singapore Exchange leads with robust performance and disciplined cost control, while Bursa Malaysia and CME Group are highlighted for their dividend yields and market stability. HKEX, Nasdaq, and Deutsche Boerse showcase strong growth and diverse revenue streams, making them key players in their respective regions.
