The Singapore Exchange Group (SGX) saw the bellwether Straits Times Index (STI) gaining 2.2% m-o-m, taking ytd calendar gains to 19% and total returns to 25% for November.
See more: SGX Group’s bellwether STI gain 2.2% m-o-m in Nov; y-t-d calendar gains at 19%
Total traded value for securities rose 17.8% y-o-y, while total derivative contract volume dropped marginally by 0.7% y-o-y. Securities daily average traded value and derivative average daily volume rose 23.7% and 4.3% y-o-y, respectively.
UOB Kay Hian (UOBKH) is then keeping a "hold" recommendation on SGX with a higher target price of $17.30 from $16.66 previously.
For Jul-Nov 25, total traded value for securities rose 19.3% y-o-y, outpacing the research house's full-year projection of 16% growth. Derivatives volumes also surpassed expectations, with commodity and currency derivative contracts up 21.1% and 12.4% y-o-y, respectively (versus UOBKH's mid-single-digit growth forecasts). The commodity outperformance was driven mainly by iron ore contracts amid geopolitical uncertainty and expectations of stronger infrastructure spending in China.
In currency derivatives, INR/USD futures led the beat, with traded volume jumping 43.0% y-o-y, supported by robust Indian equity inflows and strong hedging demand against a volatile rupee.
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Analyst Roy Chen says: "We expect the MAS Equity Market Development Programme (EQDP) to continue driving trading activities in the Singapore equity market, while macro and geopolitical uncertainties should sustain hedging demand in derivatives. That said, y-o-y growth is likely to moderate: Securities traded value growth should ease to low-teens in 2HFY2026 (high-teens in 1HFY2026), and derivatives volumes should see a fattish to low single-digit growth, given the elevated base in 2HFY2025 created by the initial EQDP boost and heightened volatility amid the US-China tariff war."
While Chen keeps a "hold" call on SGX due to its current price being close to his target price, he still likes SGX’s resilient multi-asset business model and believe SGX’s value would rise with time. "Investors should accumulate SGX on share price dips," he adds.
Maybank Research Singapore on the other hand recommends to "buy" SGX with a higher target price of $18.81 from $17.67 previously.
Analyst Thilan Wickramasinghe says: "Strong November equity market data affirms our belief that SGX is structurally shifting to a higher ADV (average daily value) operating environment. With equity opex largely stable, this allows for significant upside earnings risks as
operating leverage flows through."
"Market reforms promises to improve valuations and establish Singapore as a regional equities centre. SGX should be the first-degree beneficiary of these shifts, which could also drive upside dividend surprises in 2HFY2026," adds Wickramasinghe.
In the past 10-years, SGX ADV has averaged $1.2 billion. November market ADV was $1.8 billion. Compared to January (just before the first MAS market reform recommendations were announced) ADV is 71% higher.
Wickramasinhe believes that confidence surrounding reforms together with safe haven liquidity flows to Singapore have created a new, higher ADV base for SGX. The latest recommendations reforming market microstructure could further increase liquidity from retail investors, whilst the EQDP program, should increase institutional investor demand next year.
Meanwhile, rising IPO momentum could boost flows further. In 1HFY2025, there was only one new listing, whereas the July-Nov period saw eight IPOs. Funds raised also increased from just $6 million to $2.3 billion.
"The last time we observed a similar level of IPOs was 13-years ago. We believe there is a structural shift in confidence for SGX as a listing venue. This could extend Singapore’s regional financial centre standing into equities as well, in our view," says Wickramasinghe. He also believes the proposed SGX-NASDAQ dual listing bridge could further entrench regional listing flows to Singapore.
Separately, while execution is yet to be seen, the proposed ‘Value Unlock’ programme could unleash latent valuation multiples over the medium term. He estimates 15 IPOs in FY2026 and 23 in FY2027.
"In 2HFY2026, we believe there may be upside surprise risks to dividends given stronger operating leverage, and structural reshaping of SGX’s operating environment," adds Wickramasinghe.
As at 2.40pm, shares in SGX are trading at $16.89, 35% higher ytd.
