<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>SGX gains slump 49%, outlook bleak 10 min
</TR><!-- headline one : end --><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Goh Eng Yeow
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->NINE months of misery with more likely to come. Such is life at the Singapore Exchange (SGX).
The company that runs the local bourse was on a high on Oct 10 last year with its shares at a record $16.40, but it has been downhill since. The bursting of the stock market bubble has sent its shares down by an astounding 59 per cent from that October peak, wiping $10 billion off its market value.
And its tepid fourth-quarter results, out yesterday, showed that SGX will not be turning the corner soon. Profits slumped 48.7 per cent to $90.37 million following a sharp drop in stock market turnover.
Revenues fell only 9.5 per cent to $172.04 million, but that was due to a jump in income from the futures market.
But a buoyant first half-year in the last six months of 2007 was enough to boost full-year profit by 42.7 per cent to $444.3 million, after excluding one-off items in the previous year.
Earnings per share for the year rose from 39.68 cents to 44.78 cents, while net asset value per share jumped from 78.23 cents to 93.78 cents.
SGX is hardly alone in its plight. Listed bourses NYSE Euronext and Deutsche Boerse have all fallen by over 50 per cent from their peaks last year.
While stock exchanges do not have much direct exposure to the toxic investments that have crippled many Wall Street investment banks, they have suffered serious collateral damage from the resulting turmoil in global financial markets.
Listed exchanges were prized last year as they were essentially monopolies benefiting from a sharp rise in income earned from clearing stock trades during the market boom.
Smaller bourses like SGX were also coveted as possible takeover targets following a wave of mergers among stock exchanges in Europe and the United States.
But the sky-high valuations of SGX and other regional exchanges rested on the flawed assumption that they were sexy growth stocks with earnings that would keep growing on rising trade volume. But daily trading turnover on the SGX has dwindled while new products like single-stock derivatives are still stuck in the pipeline.
Some traders believe that it should be prized for the steady stream of dividend income it gives investors, like counters in the unsexy utility sector. [email protected]
</TR><!-- headline one : end --><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Goh Eng Yeow
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->NINE months of misery with more likely to come. Such is life at the Singapore Exchange (SGX).
The company that runs the local bourse was on a high on Oct 10 last year with its shares at a record $16.40, but it has been downhill since. The bursting of the stock market bubble has sent its shares down by an astounding 59 per cent from that October peak, wiping $10 billion off its market value.
And its tepid fourth-quarter results, out yesterday, showed that SGX will not be turning the corner soon. Profits slumped 48.7 per cent to $90.37 million following a sharp drop in stock market turnover.
Revenues fell only 9.5 per cent to $172.04 million, but that was due to a jump in income from the futures market.
But a buoyant first half-year in the last six months of 2007 was enough to boost full-year profit by 42.7 per cent to $444.3 million, after excluding one-off items in the previous year.
Earnings per share for the year rose from 39.68 cents to 44.78 cents, while net asset value per share jumped from 78.23 cents to 93.78 cents.
SGX is hardly alone in its plight. Listed bourses NYSE Euronext and Deutsche Boerse have all fallen by over 50 per cent from their peaks last year.
While stock exchanges do not have much direct exposure to the toxic investments that have crippled many Wall Street investment banks, they have suffered serious collateral damage from the resulting turmoil in global financial markets.
Listed exchanges were prized last year as they were essentially monopolies benefiting from a sharp rise in income earned from clearing stock trades during the market boom.
Smaller bourses like SGX were also coveted as possible takeover targets following a wave of mergers among stock exchanges in Europe and the United States.
But the sky-high valuations of SGX and other regional exchanges rested on the flawed assumption that they were sexy growth stocks with earnings that would keep growing on rising trade volume. But daily trading turnover on the SGX has dwindled while new products like single-stock derivatives are still stuck in the pipeline.
Some traders believe that it should be prized for the steady stream of dividend income it gives investors, like counters in the unsexy utility sector. [email protected]
