Is SGX worth buying now?

• Singapore Exchange Ltd (SGX: S68) share price rallied nearly 3% this week
• The bourse operator reported its June 2021 statistics, in which total securities market turnover value slid 11% month-on-month
• The Straits Times Index generated a total return of 11.9% over the first half of 2021, ‘ranking it among the strongest three Asia-Pacific benchmarks’
• UOB and Maybank analysts recently reiterated ‘buy’ calls on SGX’s stocks
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SGX share price: what’s the latest?

Singapore Exchange (SGX) shares rallied as much as 2.8% at the start of the week to a high of S$11.45, after releasing its market statistics for June 2021.

The blue-chip counter is up 16.5% year to date. The latest analyst sentiments published by SGX StockFacts show a consensus rating skewed toward ‘neutral’, alongside a price target of S$10.74 on the stock.

The price target equates to a 5% downside potential from SGX’s last traded price of S$11.30 on Wednesday (14 July 2021).

Earlier this month, UOB analyst Lucas Teng reiterated a ‘buy’ call and price target of S$12.35 on the stock.

Teng stated that SGX’s current trading multiple of 24 times FY2022 price-to-earnings ratio is below its peers’ average of 28 times. He noted that new initiatives, including special purpose acquisition companies and secondary listings, could potentially rerate SGX closer to its similarly sized counterparts in other developed markets.

Meanwhile, Maybank’s Thilan Wickramasinghe also rated the stock a ‘buy’ alongside a price target of S$11.48, citing the company’s better-than-expected 1H 2021 profit after tax.

STI Index records strongest first six months since 2017

Total securities market turnover value on SGX slid 11% month-on-month to S$26.8 billion in June 2021, while securities daily average value stood at S$1.22 billion.

The market turnover value of structured warrants and daily leverage certificates (DLC) almost doubled month-on-month to S$613 million.

Although blue-chip barometer Straits Times Index (STI) declined 1.1% in the April-to-June quarter, it was the strongest first six months of the year for the benchmark since 2017, the bourse operator said.

The STI generated a total return of 11.9% over the first half of 2021, ‘ranking it among the strongest three Asia-Pacific benchmarks’, it added.

By product segment, total traded volume of derivatives rose 5% month-on-month to 18.9 million contracts, the highest in three months. SGX’s suite of pan-Asia benchmark equity derivatives also climbed 4% from the previous month to 13.5 million contracts in June.

This included a 14% month-on-month increase in FTSE China A50 Index FuturesFTSE China A50 Index Futures to 7.9 million contracts and a 7% gain in Nikkei 225 Index FuturesNikkei 225 Index Futures to 1.2 million contracts.

Total foreign exchange (FX) futures traded volume on SGX rose 17% from May 2021 to 2.4 million contracts in June 2021, led by a 25% monthly jump in INR/USD Futures to 1.3 million contracts.

The volume of USD/CNHUSD/CNH Futures climbed 10% month-on-month and 13% on a year-on-year basis. USD/SGDUSD/SGD full-sized futures volume reached 38,357 contracts, notching another monthly record high.

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