Singapore Exchange 3Q net profit unexpectedly falls, hit by ASX costs

Singapore Exchange (SGXL.SI), Asia’s second-largest listed bourse by market value, reported a 10.2% drop in quarterly net profit, hurt by costs related to its failed bid for ASX (ASX.AX) and higher technology spending.

SGX said its January-March net profit was $67.02 million, compared with $74.6 million a year ago. This was below the $85 million average forecast from four analysts polled by Reuters.

It incurred a cost of $12 million related to the merger with ASX and expenses rose 18% from a year earlier.

Derivatives volume saw a late surge in SGX’s third quarter, driven by heightened volatility in Japanese and Indian stock market futures following the March 11 earthquake in Japan.

SGX’s shares briefly surged after its $8 billion bid for ASX (ASX.AX) was rejected earlier this month by the Australian government, which said changes to the country’s financial systems were needed before foreigners could buy the bourse.

SGX shares are down about 3% so far this year, underperforming bigger rival Hong Kong Exchanges and Clearing (HKEx) (0388.HK) whose shares are up around 3%. ASX shares are down about 12%.