Friday, July 27, 2012

SGX - long or short ahead of tonight's result?

The Singapore Exchange is due to report its fourth quarter and full year 2012 earnings after market tonight. According to Bloomberg’s poll of 12 analysts, the street is looking at a consensus of $362.92 million for SGX’s earnings before interest and tax, a 1.4% increase over the FY11 numbers.
SGX’s stock price is currently on a seven week winning streak. Since the start of the second half of this year, the stock has gained 6.9%, although that still lags the benchmark STI’s 8.4% increase over the same period.
The stock had recently been in the spotlight following its announcement of a new partnership with the London Stock Exchange.
New partnership with London Stock Exchange
On 11 July, SGX announced their signing of a partnership with the London Stock Exchange (LSE) to enable cross-trading of their respective largest and most actively traded stocks.
As such, SGX trading members will be able to trade FTSE100 securities on SGX's GlobalQuote Board and likewise, LSE members can trade 36 selected SGX stocks on LSE's newly-created International board.
Apart from greater market access, the key benefit to investors from this partnership is to enable them to better manage their risk trade positions across different time zones, therefore, investors are able to trade for extended hours.
SGX expects the SGX securities to be quoted on LSE's international Board by early third quarter this year while selected LSE securities will be quoted on SGX's GlobalQuote by the first half of 2013.
Macquarie Research Equities has an Outperform rating on the SGX with a 12-month target price of $7.56*. SGX closed at $6.62 yesterday.

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