Singapore Exchange Limited 3Q FY2009 Financial Results

Transcription

1 Singapore Exchange Limited 3Q FY2009 Financial Results SECK Wai Kwong, CFO Singapore Exchange 15 April

2 3Q FY2009 Highlights NPAT $55.3 million: 20.6% lower q o q (2Q FY2009: $74.7 million) YTD FY09 net profit margin remains above 50% YTD FY09 operating leverage at 138% Robust risk management and regulation Continued focus on cost management and investment in technology Quarterly base dividend: 3.5 cents 2

3 Financial Review 3

4 Financial Performance (In S$ million) YTD FY09 3Q FY09 2Q FY09 1Q FY09 3Q FY08 Securities Market Revenue Derivatives Clearing Revenue Stable Revenue Operating Revenue Operating Expenses Operating Profit Other gains/ (losses) (1.7) (0.6) 0.6 (1.6) 4.8 Net Profit after tax

5 Financial Highlights (in S$ million) * ** 111* Q FY06 2Q FY06 3Q FY06 4Q FY06 1Q FY07 2Q FY07 3Q FY07 4Q FY207 1Q FY08 2Q FY08 3Q FY08 4Q FY08 1Q FY09 2Q FY09 3Q FY09 Operating Revenue Net Profit After Tax Operating Expenses * Exclude S$45.0 million write back of allowance for impairment on SGX Centre and S$65.5 million net gain on disposal of SGX Centre ** Excludes S$34.0 million distribution from SGX DT Compensation Fund 5

6 Operating Leverage (in S$ million) Coverage of operating expenses Q FY09 119% 2Q FY09 138% Q FY09 157% 156 YTD FY09 138% FY08 132% FY07 119% FY06 108% FY06 FY07 FY08 YTD FY09 1Q FY09 2Q FY09 3Q FY09 Stable revenue Net derivatives clearing revenue Securities market revenue Operating expenses 6

7 Diversified Derivatives Revenue 180 (in S$ million) Other products & services Structured warrants 156 MSCI Singapore 25 CNX Nifty MSCI Taiwan CNX Nifty, Nikkei FY06 FY07 FY08 YTD FY09 1Q FY09 2Q FY09 3Q FY09 YTD FY09: 44.4 million contracts YTD FY08: 39.4 million contracts 12.7% 7

8 Stable Revenue (in S$ million) Others Membership fees Terminal & Connection fees Price information fees Listing fees YTD FY09 vs YTD FY Account Main. & Corporate Action 25.0% in account maintenance & corporate action fees 14.2% in listing fees FY06 FY07 FY08 YTD FY09 1Q FY09 2Q FY09 3Q FY09 8

9 Operating Expenses (S$ million) FY06 FY07 FY08 YTD FY09 1Q FY09 2Q FY09 3Q FY * includes professional fees, marketing & travelling, communication charges, fees to MAS for transfer of participant supervision function, allowance/ (reversal) for impairment of trade receivables, write off./ impairment of property, plant & equipment and software, net foreign exchange loss (gain) / gain, net (gain) / loss on disposal of property, plant & equipment and software, and other operating expenses. All figures are rounded off to the nearest million Cost management: Not to exceed FY08 operating expenses of S$241 million Miscellaneous* Cost of processing & royalties Depreciation System maintenance & rental Rental & maintenance of premises Variable Bonus Share based payment expense Staff costs (excl VB & sharebased payment)

10 Operating Expenses Highlights (in S$ million) Reduction in staff cost: VB Continued investment in technology Staff costs (excl. VB) Variable Bonus (VB) System Maint. & Rental YTD FY08 Depreciation & Amort. YTD FY09 Professional Charges Cost of processing & royalties Marketing & Travelling 10

11 Performance at a Glance FY2006 FY2007* FY2008** YTD FY2009 3Q FY2009 Return on Equity 32.0% 37.5% 49.7% 31.4% # 8.1% # Cost to Income 45.1% 36.6% 31.2% 38.5% 45.2% Net Profit Margin 44.6% 52.5% 56.8% 50.7% 46.4% Regular dividend (Net) Base (cents per share) Variable (cents per share) * FY2007 figures exclude the write back of allowance for impairment on SGX Centre and gain on disposal of SGX Centre ** FY2008 figures exclude distribution from SGX DT Compensation Fund # Not annualised 11

12 Business Update 12

13 Building An Enduring Marketplace Asian Gateway Domestic Growth Asian Listing Platform Structured Products Risk Management Centre Singapore Equity Derivatives Partnerships & Alliances Retail Penetration Post Trade Processing Hub Market Oriented Regulation Operational & Technology Efficiency Customer focused Organisation Delivery Excellence 13

14 Asian Gateway Domestic 3Q FY09: 55% (3Q FY08: 52%) Asian Gateway 3Q FY09: 45% (3Q FY08: 48%) Derivatives Securities $7M 3Q FY09: 6% (3Q FY08: $11M; 6%) $58M 3Q FY09: 49% (3Q FY08: $80M; 46%) $33M 3Q FY09: 28% (3Q FY08: $41M; 24%) $21M 3Q FY09: 17% (3Q FY08: $41 M; 24%) Based on internal estimates 14

15 Securities Market Trading Activity 3Q FY09 3Q FY08 Change YTD FY09 SDAV (S$'000) 3,000,000 SDAV (S$) 0.91B 1.90B 51.9% 1.08B 2,500,000 2,000,000 SDAV: Jan 09, $1.02B SDAV: Feb 09, $796M SDAV: Mar 09, $935M 1,500,000 1,000, ,000 Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06 Sep 06 Oct 06 Nov 06 Dec 06 Jan 07 Feb 07 Mar 07 Apr 07 Note: Securities Daily Average Value (SDAV) May 07 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 15

16 Active Secondary Market Fund Raising (in S$ billion) Secondary Fund Raising Primary Fund Raising FY2007 FY2008 YTD FY2008 YTD FY New Facilitation Measures: 100% Pro Rata Share Issuance/Rights Issue Reduced Underwriting Period/Accelerated Fund Raising 20% Price Discount Limit for Placements Allow Placements to Substantial Shareholders New Sub Underwriting Arrangements Note: Primary fund raising includes funds raised from IPOs & RTOs. Secondary fund raising includes funds raised from placements and rights issues. 16

17 Derivatives Market Trading Activity Number of Contracts 350, ,000 DDAV MSCI TW Nikkei225 MSCI SG DDAV: Jan 09, 195,658 DDAV: Feb 09, 186,876 DDAV: Mar 09, 228, , , , ,000 50,000 0 Jan 06 Mar 06 May 06 Jul 06 Sep 06 Nov 06 Jan 07 Mar 07 May 07 Jul 07 Sep 07 Nov 07 Jan 08 Mar 08 May 08 Jul 08 Sep 08 Nov 08 Jan 09 Mar 09 Note: Derivatives Daily Average Volume (DDAV) 17

18 Domestic Derivatives: Extended Settlement (ES) contracts/ Single Stock Futures 1,200,000 1,000,000 Open Interest N umber of shares 800, , , ,000 Launch date: 20 Feb Feb 21 Feb 22 Feb 23 Feb 24 Feb 25 Feb 26 Feb 27 Feb 28 Feb 1 Mar 2 Mar 3 Mar 4 Mar 5 Mar 6 Mar 7 Mar 8 Mar 9 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 22 Mar 23 Mar 24 Mar 25 Mar 26 Mar 27 Mar 28 Mar 29 Mar 30 Mar 31 Mar Top 5 ES contracts: Capitaland, City Developments, NOL, DBS & SGX 18

19 AsiaClear: Growing the OTC Clearing Business Volume (Contracts) 25,000 20,000 15,000 10,000 5,000 AsiaClear Trading Volume and Open Interest Open Interest (Contracts) 14,000 12,000 10,000 8,000 6,000 4,000 2, Q FY2007 4Q FY2007 1Q FY2008 2Q FY2008 3Q FY2008 4Q FY2008 1Q FY2009 2Q FY2009 3Q FY Volume Month End Open Interest 19

20 SICOM: Our Commodities Business Trading Volume (Tonnes) 700,000 SICOM Trading Volume and Open Interest Open Interest (Tonnes) 140, , , , , ,000 80, ,000 60, ,000 40, ,000 20, Q FY2007 4Q FY2007 1Q FY2008 2Q FY2008 3Q FY2008 4Q FY2008 1Q FY2009 2Q FY2009 3Q FY Traded Volume Open Interest Market share of open interest = 45% (March 09) 20

21 Robust Risk Management: Lehman Crisis All positions closed. No loss to SGX. Day 2 Pre crisis: 11 Sep Introduced cash collateral and imposed additional margin requirements Suspended new trading activities Directed Lehman Brothers to settle all outstanding positions Before 15 Sep 08 On 15 Sep 08 On 16 Sep 08 On 17 Sep 08 Day 1 Advised Lehman Brothers prior to filing for Chapter 11 not to initiate new positions and to transfer its existing derivatives positions Day 3 Terminated trading access Executed buying in and forced selling of securities Closed out all derivatives positions 21

22 Robust Risk Management: Tightening regulatory standards Jan 2008 Feb 2008 Jun 2008 Sep 2008 Nov 2008 Dec 2008 Mar 2009 Establishment of Audit Committee Guidance Committee to strengthen corporate governance practices of listed issuers Launch of Regulator s Column to communicate SGX s perspectives on topical regulatory matters Enhancements to SGXNET announcement templates Publishing the list of buying in securities & increased penalty for failed trades Public consultation Greater transparency in short selling activities Revised error trade policy New and revised listing rules to strengthen corporate governance and enhance transparency Regulator s Column: Reminder to issuers to avoid leakage of price sensitive information and standards relating to clarification or confirmation of market rumours Engagement with Audit Committees and audit firms of listed companies to heighten vigilance in volatile market conditions 22

23 Technology Renewal Securities Market FY2008 FY2009 FY2010 FY Decommission SESOPS (Mar 2008) Trading Engine QUEST ST (Jul 2008) Pre Settlement Matching System SGXPrime (Oct 2008) Data Engine SGXDE ST Clearing, Depository & Corporate Action Derivatives Market FY2008 FY2009 FY2010 FY Market Data SGXDE DT (Feb 2008) Trading Engine QUEST DT Upgrade (Dec 2008) Clearing System SGXClear OTC Clearing System Completed Projects Projects in the pipeline 23

24 Summary Derivatives Diversified product suite and revenues Continues to be an important driver for growth Domestic Derivatives: Extended Settlement contracts & MSCI Singapore options Initiatives to grow the options market Securities FY09 run rate SDAV: Above S$1 billion/day Secondary fund raising activity Crisis Response Cost Discipline Risk Management Opportunities: Domestic Derivatives, OTC Clearing & SICOM 24

25 Thank you For enquiries, please contact the SGX IR team: John Gollifer / Judy Tan /