SGX FY 2Q10 Earnings Release, Friday, April 16th 2010 before the bell

We expect SGX to report a 3Q10 Net Income of SGD79 mn, -2% below consensus estimates

SGX 3Q10 ADV reached SGD1.49 bn (+7% Q/Q; +56% Y/Y). April 2010 volumes are still lukewarm, tracking at an ADV of SGD1.49 bn (flat Q/Q; +56% Y/Y)

· The exchange traded an average 226K contracts per day during the quarter (+4% Q/Q; +17% Y/Y). The derivatives market began the quarter with weak volumes, trading an average 146.7K contracts per day (-36% Q/Q; -33% Y/Y).

· We expect total revenues to reach SGD153 mn (+1% Q/Q; +27% Y/Y), with the bulk of the increase coming from securities trading revenues (SGD86mn, +2% Q/Q; +56% Y/Y)

· SICOM secured last month a new license to operate a Commodity Market and Clearing House under the Commodity Trading Act, allowing SICOM to extend its capability to roll out commodity products such as forwards, contracts-for-difference and leveraged commodity contracts. The company plans to launch Robusta Coffee Futures next week. SICOM ADV increased +24% Q/Q to 1,288 contracts, mainly due to the introduction of Gold contracts and in spite of a 47& decline in Rubber Futures (RSS3) traded (10,611 contracts during the quarter).

· Asia Clear volumes could rise dramatically following changes in the pricing of Iron Ore provision contracts. Asia Clear and SICOM volumes are currently less than 1% of total derivative volumes however.

· Expenses may come in higher than expected due to systems upgrades (capex) and costs relating to the JV with Chi-X

· SGX is trading at 19.3x consensus 2011 earnings, a 42% premium to the domestic index (Straits Times)

Provided By: Equity Research Desk www.erdesk.com