"The securities' daily average traded value (SDAV) could continue to rise in FY26–27, aided by the Monetary Authority of Singapore’s measures to boost the equity market," he adds.
However, given that SGX’s FY2026 yield of 2.6% is "unattractive" compared to the STI’s forward dividend yield, and given that the year to date gains in SGX's share price has already reflected potential earnings upside, his call, based on a reasonable forward PE, remains "neutral".
In April, securities volume was up 59% y-o-y, for a total turnover value of $40.6 billion. Led by retail investors, SDAV that month was up to $1.9 billion - the highest level since March 2020.
The exchange enjoyed strong growth in derivatives too, with the FTSE China A50 index futures leading the growth.
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Drawing on the April data, Jaiswal estimates that for 2HFY2025, the implied securities turnover was 13% ahead of his estimates, while the implied derivatives volume came in 4% above his estimates.
He continues to apply the same valuation multiple of 22x earnings on this counter, slightly above the 21x historical average.
His target price is based on blended earnings for FY2025 and FY2026, as he expects the announced measures to translate into higher securities trading volumes only in FY2026 and FY2027.
SGX shares changed hands at $13.99 as at 10.41 am, down 0.85% thus far today but up 11.83% year to date.
