Why are SGX shares rising?

• Singapore Exchange Ltd (SGX: S68) share price rallied to a high of S$9.85 on Thursday (11 August 2022)
• The bourse operator saw commodity derivatives volume rise to a four-month high in July 2022
• UOB analysts lifted their rating to a ‘buy’ last month
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SGX stock price: what’s the latest forecast?

Singapore Exchange (SGX) shares rallied on Thursday, after it released market statistics for July 2022.

The blue-chip counter is up by 8% in the last one month and 2.6% year-to-date.

The latest analyst sentiments published by SGX StockFacts show a consensus rating of around ‘neutral’, alongside a price target of S$10.26 on the stock.

The price target equates to a 4.4% upside potential from SGX’s last traded price of S$9.83.

UOB’s equity research team raised their rating on the stock to ‘buy’ and price target from S$9.55 to S$11.09.

On the other hand, RHB analysts kept a ‘hold’ call on SGX shares but raised price target slightly to S$10.70 (from S$10.40).

How did SGX perform in July 2022?

The bourse operator said growth in iron ore trading activity lifted commodity derivatives volume to a four-month high in July 2022, while secondary fundraising increased despite challenging market conditions.

Commodity derivatives volume climbed 57% year-on-year (YoY) to 3.6 million contracts, the highest since March.

Benchmark iron ore derivatives volume gained 68% YoY to 3.3 million contracts on the back of heightened volatility, as market participants reacted to developments in China’s property sector.

‘Iron ore remains an efficient macro proxy and the SGX Commodities solution enables participants to express their views on the broader economy,’ SGX said in a press release.

Meanwhile, derivatives traded volume across multiple asset classes rose 1% YoY in July to 20.5 million contracts, with derivatives daily average volume up 4%.

Foreign exchange (FX) futures volume on SGX FX rose 16% YoY in to 2.5 million contracts, or US$149 billion on a notional basis. The volume of SGX USD/CNH Futures – the most widely traded international RMB futures – climbed 34% y-o-y to 1.1 million contracts on increased risk management demand, as investors focused on China’s economic outlook.

SGX’s blue-chip benchmark Straits Times Index (STI) advanced 3.5% month-on-month to 3,211.56 in July 2022.

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