Singapore Exchange, the operator of the city-state’s securities and derivatives markets, said third-quarter profit fell 10% on costs linked to its failed attempt to buy Australia’s ASX.
Net income fell to $67 million from $74.6 million a year earlier, the company said in a statement today. Operating revenue climbed 10% to $169 million. Costs associated with the aborted ASX deal were $12 million, the company said.
“SGX generated strong operating results in the third quarter amidst global market uncertainty,” Chief Executive Officer Magnus Bocker said in the statement. The increase in revenue “helped offset the higher expenses from our continued investments in building SGX’s Asian Gateway.”
Bocker, who took over from Hsieh Fu Hua as CEO in December 2009, has taken steps to boost trading with the introduction of 19 American depositary receipts of Chinese companies in October and announcing a $250 million order processor that may be the world’s fastest when it goes live in August this year. His most ambitious plan, the A$8.3 billion ($10.9 billion) offer to buy ASX, was blocked by the Australian government on April 8.
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“We will continue to pursue organic as well as other strategic growth opportunities,” Bocker said in the statement.
Rejection is rare for Bocker, who stitched together eight European stock markets and sold them in a bidding war to Nasdaq OMX Group Inc. four years ago. He was president of Nasdaq OMX Group Inc. before joining the Singapore bourse.
A daily average of $1.69 billion worth of shares traded on the exchange in the third quarter, compared with $1.53 billion a year earlier, according to data compiled by Bloomberg.
Trading volumes have recovered in the past two years after tumbling in 2008 as the financial crisis dragged the world’s economies into recession. Singapore’s benchmark Straits Times Index sank by a record 49% in 2008, then surged 64% in 2009 and rose 10% last year as stimulus measures around the world helped revive the global economy.
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