©Reuters. A protective mask walks past the Singapore Exchange (SGX), which remains open during the “circuit breaker” measures to curb the coronavirus (COVID-19), in Singapore’s central business district on April 7, 2020. A man wearing a .Reuters/Edgar Hsu/File photo
(Reuters) – Singapore Exchange (SGX) posted a strong first-half profit rise on Thursday, supported by its currency and commodity derivatives business, but faced headwinds from rising geopolitical tensions and a challenging macro environment.
“We are cautious about our near-term outlook as the outlook for global growth looks subdued,” the company said in a statement. “Heightened geopolitical tensions and divergent economic performance contribute to the headwinds we face. “This is likely to further increase uncertainty.”
Adjusted net profit attributable to stock exchange operators for the six months ended Dec 31 was S$251.4 million ($187.61 million), compared with S$236.8 million in the same period last year.
Trading volumes in currency and commodity derivatives increased, offsetting lower trading volumes in the equity sector, as uncertainty in the global interest rate outlook and a slowdown in the Chinese economy weighed on sentiment.
SGX said revenue from its fixed income, currencies and commodities business rose 28.1% to S$151.9 million in the first half, accounting for 25.6% of total revenue, while revenue from the equity spot market rose by 5.5%. It decreased by 6%.
The company now expects its capital expenditures for FY2024 to be S$70 million to S$75 million, a downward revision from its previous forecast of S$75 million to S$80 million.
CEO Loh Boon Chye said, “To drive growth, we will focus on expanding our solutions to capture opportunities in Asia, grow emerging products, and further strengthen our global distribution and network.” said.
It also proposed an interim quarterly dividend of 8.5 Singapore cents per share, higher than the 8 Singapore cents it declared a year earlier.
(1 dollar = 1.3400 Singapore dollar)