Singapore Exchange is down 0.6% at $6.81, broadly in line with the STI’s 0.3% decline, amid tepid volume after reporting fiscal-1Q13 net profit fell 15% on-year to $74.3 million on lower stock-market trading volumes.
OCBC says results were in line with its expectations, but slightly below consensus. Despite some significant 1Q13 developments, including the Asean trading link’s launch and a fairly healthy IPO pipeline, OCBC plans to keeps its below-consensus fiscal-FY13 net profit estimate of $307.6 million.
“We still see challenges in the months ahead and this will continue to rein in optimism with the resultant impact of fairly muted to minimal growth in trading activities. While M&A activities came into focus in 1QFY13, especially for selected sectors, we expect interest to taper off as valuations move higher.”
It keeps a Hold call with $6.80 fair value. CIMB’s view on SGX’s outlook is a bit more blunt: “Exchanges are not the right asset class to be in right now,” it says in a note, citing global recession concerns. Orderbook quotes suggest SGX won’t break out of its $6.78-$6.84 intraday range.
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