Singapore Exchange: Buy Rating on Resilient Earnings, Structural Growth Drivers, and Rising Shareholder Returns

CGS International analyst Wee Kuang Tay reiterated a Buy rating on Singapore Exchange yesterday and set a price target of S$19.10.

Wee Kuang Tay has given his Buy rating due to a combination of factors, primarily the Singapore Exchange’s solid earnings trajectory and resilient revenue mix. He highlights that first-half FY26 net profit and revenue were broadly in line with expectations, supported by strong growth in FICC and cash equities trading, which offset weaker treasury-related income from equity derivatives amid lower interest rates. He also notes that management is maintaining disciplined cost guidance while continuing to invest in sales capabilities, product innovation, and platform upgrades, laying the groundwork for further operating leverage in the second half of the year and beyond.
Another key reason for the positive stance is the structural upside from strategic initiatives such as the new global listing board developed with Nasdaq, which is already underpinning a robust IPO pipeline of more than 30 companies and is expected to deepen market liquidity. Tay bases his target price on a premium valuation multiple, reflecting his conviction that SGX can deliver sustained earnings growth from FY26 to FY28 on the back of the ongoing equity market review with the regulator. He also emphasizes the visibility of gradually rising dividends through FY28, which should support an attractive yield profile and total shareholder return. Additional potential upside stems from further shareholder-friendly capital return measures and bolt-on acquisitions that expand SGX’s product suite, though he cautions that weaker trading volumes or a sharper drop in treasury income from lower rates would be key downside risks.

According to TipRanks, Kuang Tay is ranked #4838 out of 11984 analysts.

In another report released today, Phillip Securities also maintained a Buy rating on the stock with a S$18.30 price target.