On Feb 12, the government announced another $1.5 billion to the Equity Market Development Programme, bringing the total boost to the local market to $6.5 billion. "This should further help fund managers build deeper Singapore equity exposure, bring in third-party inflows, and improve market liquidity," says Jaiswal.
In addition, on Feb 14, MAS deputy chairman Chee Hong Tat announced the formation of the Growth Capital Workgroup tasked to strengthen Singapore as a growth-capital hub, covering measures across deal origination, fundraising and capital mobilisation, and capital recycling.
The workgroup will complete its review by the end of next year and provide interim updates on its recommendations along the way.
"These initiatives should support both primary issuance and secondary trading for SGX," he adds.
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Jaiswal is now assuming the exchange's SDAV to sustain an uptrend from $1.3 billion in FY2025 to $1.84 billion by FY2028.
In addition, he believes that SGX will pay a total dividend of 59.8 cents by FY2028, above 52.5 cents which the exchange is guiding for.
"Despite our more constructive dividend outlook, the yield remains modest," says Jaiswal, noting SGX's share price appreciation.
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Jaiswal says he likes the stock but he figures the market has already priced in the near-term uplift in trading volumes.
He is keeping his FY2027 target multiple at 26 x PE, which is 2 sd above this counter's 10-year average forward PE, which is broadly in line with regional peers, except for India.
"We still like owning SGX for its constructive medium-term setup, but valuation caps near-term upside," he says.
SGX Group shares traded at $18 as at 10.54 am, down 0.72% thus far today but up 38.78% in the past one year.
