Singapore Exchange (SGX) has maintained its “Neutral” rating with a revised target price of S$17.80, reflecting an 8% upside, according to a recent report by RHB. The exchange’s strong performance in August, marked by robust securities and derivatives volumes, has led to an upgrade in forecasts for the fiscal year 2026 (FY26). This comes as SGX continues to benefit from increased small- and mid-cap flows and resilient derivatives demand.
SGX reported a securities turnover of S$33.6b in August, a 17% year-on-year increase, with the securities daily average value (SDAV) rising to S$1.60b. This growth is attributed to institutional investors’ continued interest in small- and mid-cap stocks, supported by regulatory initiatives aimed at broadening equity participation. The report anticipates 15 new listings in FY26, bolstered by improved IPO momentum.
In the derivatives market, August saw a volume of 27.4 million contracts, with the derivatives daily average volume (DDAV) reaching 1.33 million, driven by a rally in China’s equity market. The SGX FTSE China A50 Index Futures, in particular, saw a significant 66% year-on-year increase in demand.
Despite the positive outlook, the report cautions that SGX’s valuation is nearing stretched levels. However, factors such as anticipated US Federal Funds Rate cuts and a supportive macroeconomic environment are expected to sustain trading volumes. SGX’s commitment to environmental, social, and governance (ESG) standards, with a score of 3.3 out of 4, further enhances its market position. The exchange aims to reduce its Scope 2 emissions by 42% by FY31, aligning with science-based targets.
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