Singapore Exchange (SGX)

[Big Toe]

@specuvestor
Yes. You are right. A great majority of analysts and fund managers are probably only good at interpreting numbers. Owners are the ones who make the numbers happen. Most small/successful businesses owners usually have no clue how much their business is worth and they dont give any thought about valuation. What they do know is how to be run it very successfully and often they do posses very specialized knowledge and skills. The medium and large companies will have a clearer picture as they deal with bankers and analysts.


@Weijian
congrats on your business, the insight provided by being a business owner far exceeds that of an MBA or any investment course. But I beg to differ on the part of being on bailing out. If ample due diligence is done, facts are never wrong. Certain assumptions can be wrong but usually it can be corrected if managed properly most of the time.

If one chooses to bail, the money you have invested/lost in a listed company and the business you created is the same. Except the former you might have less attachment to it due to the ease of buying and selling. But bear in mind all companies will face tough times sooner or later. Conviction, ability to adapt and ability to stomach market cycles is needed in both for what you have invested and what you own/run. I personally do not see much of a difference between the 2.

[weijian]

Hi Mushy,

Thanks for updating us. I was around too - abeit only attended less than half of the first session (but I did catch the raindrop comment too) and then sat nearby Mano for the entire 2nd session.

With a decent TSR and a rising (sustainable) dividend in the last 2 FYs alone, not surprising that the BOD/Mgt had an easy time. So easy that I observed Mano was largely focused on his hp after he completed his customary questioning. All of us are guilty of not throwing stones when times are good.

I don't think Mano only tend to challenge BOD of smaller companies. Rather, Mano's challenges could actually be construed as a red flag indicator of companies, isn't it? So much so that when Mano's relaxed about it, what does it reflect? And on the extreme end when Mano was legally threatened, what does it reflect?

SGX has been an indirect beneficiary of the efforts of the MAS Review Group. Having someone to pay your "marketing bills" like grants for research reports and the 5bil EQDP is a great business model.

That said, I am glad the "highly paid" CEO knows that this is only the beginning. Liquidity begets more liquidity but things can easily reverse if the momentum isn't strong enough to sustain a virtuous cycle. Some of the IPOs, especially the REITs - NTT DC REIT and CAREIT have raised pretty decent sums of money (by SGX standards). The IPO names are refreshing but they are not exciting, or actually they are pretty boring. What really will move the IPO needle - (A) getting some of those big mega caps which incorporate themselves in Spore to do a secondary listing (like what Prudential did many many moons ago). (B) The government should do some "common prosperity" and listed its marque GLC businesses.

SGX to sharpen focus on ecosystem initiatives to sustain equity market growth

[SINGAPORE] To maintain the momentum of the recent uplift in local equities, the Singapore Exchange (SGX) will focus on expanding its product offerings and advancing ecosystem-wide initiatives. This, said chief executive officer Loh Boon Chye, will help “turn this buoyancy into long-term growth”.

He acknowledged that the review group’s efforts have supported the equity market uplift, but stressed that this is “only the beginning”, adding that “what matters is sustaining this momentum”.

He also indicated that SGX expects more initial public offerings (IPOs) for the remainder of the year, with four companies – Soon Hock Enterprise, Coliwoo, Leong Guan and Infinity Development – filing preliminary documents for their IPOs over the past two weeks.

https://www.businesstimes.com.sg/compani...ket-growth

[weijian]

Since DBS has a leadership position in local equities underwriting, I guess it will be a good year for IPOs as the DBS guy has mentioned. But over the "dearth of local equities" of the last decade, SGX has diversified its offering with FX and equity derivatives now occupying substantial percentages of the topline (and growing). The equity-cash business (in terms of growth) is more of an icing on the cake but I suppose as shareholders, it is always preferable to eat cakes with icing than not.

‘One of the best years ever’: DBS’ equities head sees buoyant 2026 for Singapore IPOs

[SINGAPORE] Initial public offering (IPO) volumes on the Singapore bourse in 2026 could be “substantially much more” than the level set in 2017 – the strongest year for listings in the last decade – said Art Karoonyavanich, managing director and global head of equity capital markets at DBS.

“If you look at 2026, the volume will likely be better – (perhaps) one of the best years ever, in terms of IPO volume for Singapore,” he told The Business Times in a recent interview. The Singapore Exchange (SGX) raised US$4.4 billion in IPO proceeds from 36 listings in 2017, Bloomberg data indicated, a level that has not been matched in the past decade.

In 2025, DBS climbed two spots from the previous year to top the Bloomberg league table for equity and rights offerings in Singapore, with US$1.1 billion in deal volumes across 12 transactions – just shy of a quarter of total volumes.

Greater liquidity in listed small and mid-cap stocks could, in turn, encourage similarly sized private companies to pursue IPOs, with EQDP-backed asset managers potentially stepping in as cornerstone investors – creating a cycle, he explained.

“From a supply perspective… the supply (of companies ready to list) is there,” he said. “From a demand perspective (in terms of investor appetite), it’s also been built up already.”

https://www.businesstimes.com.sg/compani...apore-ipos

[weijian]

27 May 2020 SGX halted

(click for sgx announcement)

SGX reduce MSCI license agreement from Feb 2021.
MCSI Singapore futures and options remain listed, license agreement for all other MSCI products will expire in Feb 2021.

If we were to use the first 10months (FYTD 2020) of the derivatives volume based on April 2020, the MSCI indices probably takes up ~25mil (16%) for non-Spore and ~10mil (6%) for Spore. For the non-Spore volume, the majority of them is coming from 1 country, Taiwan (~20mil). So in a sense, after taking away Spore/Taiwan, MSCI stuff had never reached critical mass and it is actually minuscule. (p.s all these are quick back of envelope calculations for approximation purposes)

SGX April 2020 derivative report: https://api2.sgx.com/sites/default/files...202020.pdf

Nonetheless, the removal of all MSCI indexes (except Spore) is probably a similar hit like the Niffy contract saga 2-3 years back. It is a brave new world that SGX is venturing into - by removing the support from MSCI and probably trying to fill the gap with SGX Edge.

Coincidentally, MSCI isn't too sad as they have a new bigger partner.
https://www.hkex.com.hk/News/News-Releas...sc_lang=en

6years after announcing a divorce, MSCI and SGX are back together again. But plenty has changed since covid and so it will be interesting to observe the type of products to be rolled out (which I suspect should be catered for more for institutions than retail)

SGX Group cements its position as a global derivatives powerhouse

SGX Group (Singapore Exchange) is strengthening its global derivatives franchise with a comprehensive expansion of its equity derivatives shelf. Under a new licensing agreement with MSCI, SGX will introduce up to 100 new contracts.

The initial phase comprises around 40 futures and options contracts across major developed and emerging markets economies. These contracts span MSCI's flagship global developed market benchmarks, key Asia-Pacific single-country indexes and EM Asia sector indexes, expanding the tools available to investors to manage equity risk across global portfolios.

The expansion reflects how institutional portfolios are now managed across benchmark suites and regions and strengthens SGX’s role as a trusted offshore venue for centrally cleared portfolio hedging and benchmark exposure on one platform.

https://links.sgx.com/FileOpen/20260723%...eID=897126

[weijian]

SGX is clearly more than just a securities market
It is growing its overseas footprint, setting up new offices in major cities and inking numerous MOUs
https://www.businesstimes.com.sg/compani...ies-market

Long time ago, I figured that SGX was on the right path - Since it failed to become the "Asian Equity Exchange of Choice", the non equity-cash BUs would be the main driver for growth with the equity-cash BU as the icing on the cake. On hindsight, both turned out great as the non equity-cash BUs punched much higher than its weight class while the equity-cash BU hit a bottom before "forcing" MAS's hands. I have tracked SGX's trading volumes since 2013 and current securities daily traded value, largely led by the larger caps, is comfortably ~10% higher than the pre-penny stock saga crash period.

In late 2010s/early 2020s, SGX started a little bit of VC investing, with small little stakes here or there. These small bets mostly didn't turn out well but one of the biggest one (7Ridge) had a happy ending with ~61% returns over 4 years (based on my tracking of the cashflow statement). In the same period, to my annoyance, it took on debt to do M&A to augment its businesses. Again, most didn't work like index provider Scientific Beta which had ~90% capital loss, or Trumid XT a fintech where bonding trading on the secondary market never took off. But the biggest ones MaxxTrader and BidFX seemed to turn out fine as it added OTC (over the counter) FX customers onto its fledging centralized FX trading business and expanded its supermarket suite of offerings.

Now, when will Spore gets its own SpaceX or SK Hynix? To answer this question, one needs to go back to first principles. To get it its own SpaceX, Spore will need to attract its first "Elon Musk". Sim Wong Hoo (Creative Technology) came close but wasn't extreme enough nor attracted enough talent to surround him. As for SK Hynix, besides limping between crises stemming from memory boom/busts and getting gov bail-outs along the way, it worked on the packaging technology for high bandwidth memory (HBM) for a decade before finally hit jackpot with ChatGPT introduction in late 2022. Are there enough policy makers (or chaebol owners) in Spore who will literally throw money into such national building on bets in technology that would see no light for a decade?

‘SGX needs to be better understood,’ says CEO Loh Boon Chye

Securities’ daily average value recently surged to S$1.8 billion, hitting an 18-year high, but market watchers continue to bemoan the lack of a marquee initial public offering, and retail investors remained bruised by the poor first-day share price performance of several recent debuts.

It has not been an easy ride managing expectations for a long-suffering domestic cash market. During a recent interview, Loh offered a rare, mild complaint about the company he has run for more than a decade.

”SGX needs to be better understood,” he said.

Net revenue for the full-year ended June hit S$1.48 billion – nearly doubling from a decade ago – as SGX transformed itself into a global risk-management tollbooth, clearing Chinese equity futures, Indian index derivatives and bulk commodities for the world’s largest investment banks.

Whenever the exchange reports its numbers, the conversation inevitably drifts towards the same question: When will Singapore get its own SpaceX or SK Hynix?

The management believes the recent jump in cash turnover is a permanent fixture, rather than a passing phase, underpinned by the S$5 billion Equities Market Development Programme and the SGX Value Unlock Programme to slowly fix structural valuations.

And for yield-hungry investors, there is a compelling caveat attached to SGX’s capital accumulation: Further capital could be returned to shareholders, if no suitable value-accretive mergers and acquisitions materialise.

For FY2026, the board proposed a one-off additional dividend of S$0.125 a share following capital recycling gains during the year, on top of a final quarterly dividend of S$0.115 a share.

As capital allocation to Asia continues to grow, global investors need efficient ways to manage their risks in different asset classes.

The local market still treats the exchange like a struggling domestic stock market, waiting for a tech giant to save the day. But the reality is that SGX has already saved itself.

https://www.businesstimes.com.sg/compani...-boon-chye

[specuvestor]

To invert the thought like Munger mentioned, if SGX doing well especially the cash business, then EQDP, getting FO to mandatorily invest in SG securities for fast track tax and GIP, is unnecessary ie they broke through $12 high cause government bailed them out. That was nonetheless the catalyst past 2 years

SGX killed Sesdaq I'm still waiting for the alternative (not Catalist), after throwing the baby with the bathwater

[weijian]

To invert the thought like Munger mentioned, if SGX doing well especially the cash business, then EQDP, getting FO to mandatorily invest in SG securities for fast track tax and GIP, is unnecessary ie they broke through $12 high cause government bailed them out. That was nonetheless the catalyst past 2 years

SGX killed Sesdaq I'm still waiting for the alternative (not Catalist), after throwing the baby with the bathwater

Hi specuvestor, 

I only vaguely remember the last time SGX's cash equity BU had its swagger - attracting Prudential to do a secondary listing on SGX, getting Superman to list HPT on SGX, or talks of AIA/Manchester United/F1 listing here.

Cash equity BU's daily traded volumes only exceeded its pre penny stock saga crash's high some time in early 2026. Since the crash happened in 2013, it has been a lost decade for the BU. For comparison, HKEX's headline average traded value quadrupled in the same period.

So you are right, the BU needed some "intervention".

P.S. Having the gov bail or give up legs-up to your business, is a great business model. Ditto the CDC vouchers that lift Sheng Siong's results.

[specuvestor]

I remember the streams of delisting and the next to non existent IPO pipelines Less than 50 stocks were larger than SGD1b not too long ago

It was somewhat existential rather than CDC vouchers were wind under SSG wings

To be fair SGX fortunes also tied to SG entrepreneurial (or lack of due to MNC policy tilt) spirits / market size and SGD controlled currency, which are not easy to resolve. 

But having flip flop non market friendly policies doesn't help. HKEX rules are clear and strict though there are always rogues trying to beat the system but HKEX doesn't change the rules because of these 5%, which they will get clamped hard if caught. Target the perpetrators not the market dynamics.