SGX share price on sparkling form after reporting highest profits in 11 years

SGX share price is in the form of its life following the release of solid full-year financial results for FY2019 that saw the bourse operator delivering the highest profits in 11 years. Revenue of $909.8 million was also the highest in 19 years. With such stellar report, no wonder SGX share price rocketed in recent weeks.

It has been 4 years since Loh Boon Chye took over as CEO of SGX. On the basis of the past four years of financial records, I would give Loh Boon Chye an A+ for his leadership performance. Under his tenure, net profits surged from $349 million in FY2016 to $391 million in FY2019. What is even more impressive is that the Return on Equity (ROE) has increased to 36%. Against this backdrop, will SGX share price hit $10, a level last seen in 2010?

SGX share price

On looking back, Loh Boon Chye certainly brought peace and stability to SGX share price. This is in deep contrast to his predecessor, Magnus Bocker, who presided SGX over the period of penny chip meltdown, trading breakdowns and the fallout from the S-chips saga. While these episodes had long blown over, SGX is dealing with a new set of challenges – dearth of IPOs and slew of companies applying to delist.

In my opinion, whether SGX share price can re-capture its giddy of height again will largely depends on the execution of the CEO’s multi-asset strategy. Currently, SGX is focusing its business in equities, bonds, derivatives and data connectivity. Read on to find out the prospect of SGX share price.

SGX share price turbocharged by derivatives business

In my opinion, SGX share price is unlikely to suffer the same fate as SPH, M1 and SingPost. This is because the management has managed to reinvent the wheel over the past decade, making sure that the business stay relevant in the new economy. In doing so, SGX is shifting away from a Singapore-centric and product-centric to a global market operator with diversified revenue sources.

This counter is also a fan favourite among the big boys. The strong buying interests among fund houses led to strong momentum for SGX share price since the start of 2019. SGX share was among the top 5 institutional net buying list in 2019 (January, February, May and June).

Part of the reason for the resurgent SGX share price is the [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: August 6, 2019 — 7:30 am

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