The Singapore Exchange (SGX) is seeing “positive momentum in the stock market” with institutional and retail flows into the mid-cap stocks, says group CEO Loh Boon Chye at SGX’s FY2025 results briefing on Aug 8.
“Our index stocks, our REITs have always traded very well, but what has obviously changed is the mid-cap stocks,” he adds. “On top of that… clearly there is shifting investment capital flows. We’re seeing that.”
The FY2025 was a “defining year” for SGX, marked by its strongest performance on record. During the year, SGX reported a record revenue and net profit with broad-based growth across all of its operating segments.
The shift in flows has benefitted SGX’s multi-asset strategy as the exchange sees more of its customers adding more asset classes to their portfolio.
Following its record year, SGX has proposed a final quarterly dividend of 10.5 cents per share, 1.5 cents higher and 16.7% up y-o-y. This brings SGX’s total FY2025 dividend to 37.5 cents per share.
The bourse has also proposed a 0.25-cent increase in its dividend every quarter from FY2026 to FY2028. Should the proposed increase go through, FY2026 will see a total dividend payout of 44.5 cents while FY2027 and FY2028 will see total dividends of 48.5 cents and 52.5 cents per share respectively.
“We’re confident in our ability to deliver the step up in dividends,” says chief financial officer (CFO) Daniel Koh, on the sustainability of SGX’s dividend growth. “But in this day and age, who knows what will happen… [it could be like] Covid-19… we always need to have the caveat in there, but we are confident.”
On balancing its dividend and investing in its core business, Loh said the group is looking at “sustainable long-term growth”.
While the group aims to deliver growth to its stakeholders and shareholders over the medium to long term, it seeks to balance that with returning capital in the form of guidance for the next three years.
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At the same time, the group is looking to grow via opportunities such as bolt-on acquisitions.
The group’s strong balance sheet and cash flow will allow the team to look at value-accretive opportunities as well as sustain its dividends.
“I think FY2025 has clearly demonstrated that the multi-asset strategy that we’ve talked about for years is coming through in an environment like that. It’s not just FY2025, we’ve seen parts of that in FY2023 and FY2024,” Loh says.
He adds that he hopes the group’s payout ratio will provide SGX’s shareholders with “better clarity” on its forward trajectory.
SGX is also looked upon as a dividend cum growth stock, says Koh. As such, the group has to balance that with regard to enhancing shareholder return but also investing in sustainable growth, he adds.
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