Despite the recent weak market statistics released by the Singapore Exchange, CGS-CIMB Research has maintained its “add” rating for the bourse operator with an unchanged target price of $11.61.
The brokerage believes trading momentum will be sustained by the “buoyant” market sentiment and prolonged Covid-19-related movement restriction orders.
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The potential secondary listings of Grab and Sea on SGX could further boost volumes, it says.
On May 10, SGX announced that its securities daily average value (SDAV) slipped 9% y-o-y and 24% m-o-m to $1.3 billion in April.
This is below the SDAV average in 1Q 2021 of $1.5 billion.
The total derivative volume in April, meanwhile, was 5% higher y-o-y at 17.5 million contracts.
However, this was down 24% m-o-m from an eight-month high of 23.2 million contracts in March.
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“Notwithstanding the weaker equity turnover in April 2021, monthly average SDAV tracks well within our $1.3 billion estimate for FY2021, although those of derivatives remain below our projection of 261 million contracts,” CGS-CIMB analyst Andrea Choong writes in a note dated May 10.
As at 3.36 pm, SGX was flat at $10.06 with 2.9 million shares changed hands.
