Singapore Exchange (SGX)

[wee]

Thanks for sharing D123. 50% potential assuming the merger goes thru? However, I think the general popular view is that this deal has <50% chance of getting done. As such, one should note that this bet is more speculation than arbitrage.

Why do SGX have a potential return of 50% ?

Okay, I did this calculation briefly so there might be mistakes. But here's the logic.

The offer made by SGX is
Cash: A$22
Stock: 3.473 SGX shares (newly issued)
Assuming 1.28 AUDSGD exchange rate, the total offer is S$57.68.

Let's say you enter a trade whereby you short 3.473 SGX shares at S$8.50 and long one ASX share at A$38. Your outlay will be S$48.64(ASX share) - S$29.52(SGX shares) = S$19.12. The correction that should take place is about S$9.04, which can be quickly calculated by the shortfall between the offer in SGD and one ASX share in SGD. Therefore, this S$9.04 price correction represents about 50% return from your S$19.12 outlay.

Of course this is theoretical, and doesn't include transaction costs and borrowing costs of holding short positions. A weakening of the AUD by x% will also increase the returns by approximately the same basis points, with the converse being true also.

[shanrui_91]

i discovered that SGX is not the only exchange in Singapore on friday when i went down to SMX which is a future exchange.

http://www.smx.com.sg/Index.aspx

For some odd reason, MAS granted Singapore Mercantile Exchange "Approved Exchange" status in 2010 and is backed by Financial Technologies (India) Limited. Not to be belittled, they have crossed USD 500m daily turnover in 2011 and they are also the only one in Asia to offer Black Pepper Future trading. However, the in-charge has said that they don't intend to compete directly with SGX given that SGX is more focused on equity index future. Competing products for now are perhaps gold and oil future. SMX intends to introduce trading for 4 more metals products in the coming months.

[swakoo]

here we go again...

LSE in merger talks with Singapore exchange

LSE Gains in U.S. Over-The-Counter Trading on Merger Speculation

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meanwhile, STI outperforming regional exchanges past few weeks - flight to safe haven??

[Image: z?s=%5eSTI&t=6m&q=l&l=on&z=l&c=%5EHSI,%5...&region=US]

[CityFarmer]

Will the new tightened rules fence out low quality S-Chips?

SGX tightens listing criteria
by Thomas Cho

http://www.todayonline.com/Business/EDC1...g-criteria

SINGAPORE - Companies aspiring to go public on the mainboard of the Singapore Exchange (SGX) will face more stringent requirements from next month as the bourse seeks larger and higher-quality listings to raise its profile to investors worldwide.

The new rules, which kick in on Aug 10, require profitable companies to have a market capitalisation of at least S$150 million and an operating track record of at least three years, SGX said yesterday.

Unprofitable companies seeking a listing would need to have a minimum market value of S$300 million, and also need to have operating revenue in the last financial year.

Those that do not meet the market cap requirement need to show consolidated profit of at least S$30 million for the latest financial year and have an operating track record of at least three years.

...

* go to the link for more detail *

[wsreader]

I don't quite understand the synergy for a bourse operator to make its foray into the electricity market. The argument is like saying in order to pioneer commodity trading and related derivatives, sgx decided to invested in a commodities trading company?

Nonetheless, since EMC is the operator of Singapore's market for wholesale electricity trading, it would be interesting to find out whether speculators can short the market leading to a cheaper electrical bills for us?

[CityFarmer]

I don't quite understand the synergy for a bourse operator to make its foray into the electricity market. The argument is like saying in order to pioneer commodity trading and related derivatives, sgx decided to invested in a commodities trading company?

Nonetheless, since EMC is the operator of Singapore's market for wholesale electricity trading, it would be interesting to find out whether speculators can short the market leading to a cheaper electrical bills for us?

any link to get more detail? sound silly for SGX to invest on commodities company?

[wsreader]

cityfarmer, i was just wondering aloud regarding the rationale given by sgx on its stake in EMC. Besides the obvious expansion of its current portfolio of energy products and OTC clearing services, sgx also stated that it will be "well-paced to pioneer electricity and related derivatives." So does it mean that it has to invest in a commodities trading company to offer more commodity trading products and related derivatives?

Please do not look at me if noble group or other commodity trading companies start to move up. I am not involved.

[2V.]

Vested

SINGAPORE : Rising interest in derivatives trading helped lift earnings for the Singapore
Exchange (SGX) last quarter.

Asia's second-largest bourse operator reported a 17 per cent on-year rise in second-quarter net profit to S$76 million.

It also attracted a large number of new bond listings in the same quarter.

Derivatives trading has been the star performer in SGX.

Over the October to December quarter, derivatives daily average volume on SGX hit a record of 358,532 contracts, up 30 per cent on-year.

This was supported by rising trading interests in China A50 futures and Japan Nikkei 225 options.

Not to be undone, the securities market performed well too.

Its daily average volume rose 8 per cent for the quarter to hit a trading value of S$1.2 billion.

This translates to a revenue of S$58 million for the securities business segment.

SGX said the better performance was due to improvements in investor sentiment following stability over the Europe debt situation and improved US economy.

Magnus Bocker, chief executive officer of Singapore Exchange, said: "We should remember the enormous amount of liquidity in the market. Not so much in the equity market, but actually more in the fixed income and currency markets, and with chasing yields and lot of very successful and growing companies, I think we can all expect this sentiment to continue. I think we can expect more flows into securities."

Some analysts are bullish on SGX's prospects going forward.

The said the improved investment climate globally may benefit the exchange operator.

Ken Ang, investment analyst at Phillip Securities Research, said: "SGX is very well placed to benefit from this increasing attractiveness of the equity market and therefore resulting in increase in trading value."

SGX attracted eight new listings in its second quarter - raising S$798.9 million.

While the number seems small, it came amid declines in the global initial public offering (IPO) market.

In 2012, global IPO volumes fell 27 per cent, with the lowest level of funds raised since 2009.

Kenneth Ng, head of Singapore research at CIMB Research, said: "I think while that (derivative) is great and that diversified the revenue of SGX, SGX still has a rather pertinent problem of trying to increase the security turnover velocity and value by retail initiatives, attracting listings and so forth."

Apart from seeking more IPOs, SGX also attracted some 90 new bond listings, raising S$39.7 billion for the quarter.

- CNA/ms

[CityFarmer]

This is a favorable move by SGX...

SGX tightens grip on Asian derivatives market

SINGAPORE — Singapore Exchange (SGX) has announced two new tie-ups with other Asian bourses and disclosed plans for a number of new trading products as it tries to strengthen its position as the region’s top exchange for derivatives.

SGX has signed a deal with Korea Exchange to explore how they can collaborate on derivative clearing services, a move that comes as Asian countries grapple with how to bring in global reforms to the over-the-counter swaps markets.

http://www.todayonline.com/business/sgx-...ves-market

[a74henry]

This is a favorable move by SGX...

SGX tightens grip on Asian derivatives market

SINGAPORE — Singapore Exchange (SGX) has announced two new tie-ups with other Asian bourses and disclosed plans for a number of new trading products as it tries to strengthen its position as the region’s top exchange for derivatives.

SGX has signed a deal with Korea Exchange to explore how they can collaborate on derivative clearing services, a move that comes as Asian countries grapple with how to bring in global reforms to the over-the-counter swaps markets.

http://www.todayonline.com/business/sgx-...ves-market

Finally, SGX understands the benefits of collaborations. This is definitely better than M&As which failed.