Singapore Exchange Limited 1Q FY2009 Financial Results

Transcription

1 Singapore Exchange Limited 1Q FY2009 Financial Results 15 October 2008 Singapore Exchange 1

2 1Q FY2009 Financial Performance NPAT fell 35% from record 1Q FY2008 Operating profit flat compared to 4Q FY2008 Strong growth in net derivatives clearing revenue Expenses fell with lower variable bonus provision Operating leverage improved to 157% 2

3 Q1 FY09 vs Q1 FY08 Drop from record quarter In (S$M) 1Q FY09 1Q FY08 Y o Y Change Securities Market Revenue % Net Derivatives Clearing Revenue % Stable Revenue % Operating Revenue % Operating Expenses % Operating Profit % Other gains/ (losses) (1.6) (1.0) NM Net Profit after tax % ROE in % (quarterly figure) 9.1* % * The 1Q FY2009 ROE figure is relatively lower compared to 1Q FY2008 because of the later timing of this year s Annual General Meeting of which the final dividend for FY2008 was approved. If the proposed dividend had been removed from the equity base as per 1Q FY2008, the ROE would be 13.6%. 3

4 Q1 FY09 vs Q4 FY08 Flat operating profit In (S$M) 1Q FY09 4Q FY08 Q o Q Change Securities Market Revenue % Net Derivatives Clearing Revenue % Stable Revenue % Operating Revenue % Operating Expenses % Operating Profit % Other gains/ (losses) (1.6) 4.3 NM Net Profit after tax % ROE in % (quarterly figure) 9.1* % * The 1Q FY2009 ROE figure is relatively lower compared to 1Q FY2008 because of the later timing of this year s Annual General Meeting of which the final dividend for FY2008 was approved. If the proposed dividend had been removed from the equity base as per 1Q FY2008, the ROE would be 13.6%. 4

5 Financial Highlights (in S$M) ** 130 *** * Q FY06 2Q FY06 3Q FY06 4Q FY06 1Q FY07 2Q FY07 3Q FY07 4Q FY07 1Q FY08 2Q FY08 3Q FY08 4Q FY08 1Q FY09 Operating Revenue Net Profit After Tax Operating Expenses * Excludes the S$45.0 million write back of allowance for impairment on SGX Centre ** Excludes the S$65.5 million gain on disposal of SGX Centre *** Excludes the S$34.0 million distribution from SGX DT Compensation Fund 5

6 Operating Leverage (in S$M) Operating Leverage* 1Q FY09 157% 4Q FY08 120% Q FY08 135% FY08 132% Stable revenue Net derivatives clearing revenue * Operating FY06 FY07 FY08 1Q FY08 4Q FY08 1Q FY Securities market revenue 172 Operating expenses FY07 119% FY06 108% Leverage = Coverage of total operating expenses by derivatives revenue and stable revenue 6

7 Revenue (S$M) Derivatives Revenue Other products & services Structured warrants MSCI Singapore CNX Nifty MSCI Taiwan Nikkei FY06 FY07 FY08 1Q FY08 4Q FY08 1Q FY Q FY09 on 4Q FY08 11% 21% increase in futures trading volume 7

8 Stable Revenue (S$M) Others Membership fees Terminal & Connection fees Price information fees Listing fees Account Main. & Corporate Action fees FY06 FY07 FY08 1Q FY08 4Q FY08 1Q FY09 1Q FY09 on 4Q FY08 7% 20% decrease in account maintenance & corporate action fees 8

9 Operating Expenses Highlights S$M 1Q FY08 4Q FY08 1Q FY Q FY09 on 4Q FY08 22% 61% decrease in variable bonus 0.0 St af f Cost s (excl VB) Variable Bonus Syst em Maint. & Depreciat ion Cost f or processing & Ot hers * Rent al royalt ies * includes share based payment expense, rental and maintenance of premises, professional charges, marketing & travelling, communication charges, fees to MAS for transfer of participant supervision function, net foreign exchange loss/ gain, net loss on disposal of property, plant and equipment and software, and other operating expenses. 9

10 Performance at a Glance FY2006 FY2007* FY2008** 1Q FY2009 Return on Equity 32.0% 37.5% 49.7% 36.4%*** Cost to Income 45.1% 36.6% 31.2% 33.7% Net Profit Margin 44.6% 52.5% 56.8% 53.9% Regular dividend (Net) Base (cents per share) Variable (cents per share) * FY2007 figures exclude the writeback of allowance for impairment on SGX Centre and gain on disposal of SGX Centre ** FY2008 figures exclude distribution from SGX DT Compensation Fund *** Annualised figure. The 1Q FY2009 ROE figure is relatively lower compared to 1Q FY2008 because of the later timing of this year s Annual General Meeting of which the final dividend for FY2008 was approved. If the proposed dividend had been removed from the equity base as per 1Q FY2008, the ROE would be 13.6%. The annualised ROE would be 54.4%. 10

11 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 11

12 Connections of the Asian Gateway Asian Gateway Capital Raising Platforms Risk Management Centre Xinhua A50 Futures MSCI Taiwan Futures CNX Nifty Index Futures Nikkei Index Futures Euroyen Futures Structured Warrants MSCI India ETF S&P Nifty ETF Japan, Korea & ASEAN ETF Structured Warrants 217 listings: 150 China 49 Hong Kong 18 Taiwan Greater China 5 listings & 9 Global Depository Receipts (GDRs) India 64 listings: 55 S.E. Asia 7 Japan 2 Korea Rest of Asia As at 30 Sep 08 12

13 Asian Gateway Domestic 1Q FY09: 52% (4Q FY08: 52%) Asian Gateway 1Q FY09: 48% (4Q FY08: 48%) Derivatives Securities $11M 1Q FY09: 7% (4Q FY08: 6%) $71M 1Q FY09: 45% (4Q FY08: 46%) $45M 1Q FY09: 28% (4Q FY08: 25%) $31M 1Q FY09: 20% (4Q FY08: 23%) * Internal estimates 13

14 Securities Trading Activity 190 1Q FY09 4Q FY08 Change Value (S$B) SDAV (S$B) % 21.7% 170 Trading Value ($ Billion) Volume shares (in Billion shares) QFY01 3QFY01 4QFY01 1QFY02 2QFY02 3QFY02 4QFY02 1QFY03 2QFY03 3QFY03 4QFY03 1QFY04 2QFY04 3QFY04 4QFY04 1QFY05 2QFY05 3QFY05 4QFY05 1QFY06 2QFY06 3QFY06 4QFY06 1QFY07 2QFY07 3QFY07 4QFY07 1QFY08 2QFY08 3QFY08 4QFY08 1Q FY % Trading Volume (Billion Shares) Trading Value Trading Volum e 14

15 Market Access Products ETFs 2,500 2,000 1,500 1, , FY06 FY07 FY08 1Q FY08 4Q FY08 1Q FY09 Traded value of ETFs: 277% Jan to Sep 2008: S$2.2B Jan to Sep 2007: S$584M Currently, the 19 SGX listed ETFs offer exposure to: Greater China, India, Hong Kong, Japan, Korea, ASEAN, Taiwan, Gold, Commodities 15

16 Growth in Futures Volumes 1Q FY09 4Q FY08 1Q FY09 on 4Q FY08 Total contracts (in millions) % Top 4 contracts 7.2 Million Contracts QFY04 2QFY04 3QFY04 4QFY04 1QFY05 2QFY05 3QFY05 4QFY05 1QFY06 2QFY06 3QFY06 4QFY06 1QFY07 2QFY07 3QFY07 4QFY07 1QFY08 2QFY08 3QFY08 4QFY08 1QFY09 Nikkei MSCI TW MSCI SG CNX Nifty 16

17 Single Stock Derivatives Target launch: November 2008 SSDs are forward contracts traded on the SGX with a 35 day cycle. Also known as Extended Settlement (ES) contracts ES contracts on 50 stocks initially (both index and non index stocks) Margins of up to 5 to 20% of contract value Targeted at retail investors who can now long and short selected stocks listed on SGX with this product To plug the gap in the domestic derivatives revenue (7% of total revenues in 1Q FY2009) 17

18 Integrated Risk Management Practices of SGX as a Central Counterparty (CCP) Monitoring of Financial Resources & Supervision Of Clearing Members Integrated Risk Management Practices of a CCP Margins & Collateral Management Daily Monitoring Of Risk Exposures Efficient Clearing & Settlement Clearing Fund Resources 18

19 Summary Derivatives market Robust growth in derivatives market Single stock derivatives to be introduced in November 2008 Securities market SDAV above S$1 billion/ day Financials Cost management Other Key Developments SGX Prime launched on 13 October 2008 Technology refresh 19