Moody’s Ratings has affirmed Singapore Exchange Limited’s (SGX) Aa2 long-term local and foreign currency issuer ratings, maintaining a stable outlook. The affirmation reflects SGX’s strong profit margins, low debt leverage, and moderate scale compared to global exchanges. The Aa2 ratings are two notches above SGX’s standalone A1 assessment, indicating a high probability of support from the Singapore government in times of need.
SGX’s pre-tax margin is expected to remain high at around 55% over the next 12 to 18 months, driven by its local monopoly, vertical integration, and diversified franchise. The group’s adjusted pre-tax earnings growth is projected to be in the mid to high single-digit percentage range, supported by the Singapore government’s focus on reforming the domestic equity market and increased investor participation in its derivative trading sessions.
SGX’s Debt/EBITDA ratio has declined to 0.8x as of 30 June 2025, continuing a deleveraging trend since 2022. Despite being open to debt-funded acquisitions, SGX’s strong cash position is expected to keep its debt leverage manageable. The creditworthiness of SGX’s clearing houses remains robust due to investment-grade clearing members and risk management standards aligned with global best practices.
Whilst SGX’s ratings are the highest among rated exchanges, an upgrade is unlikely unless the group significantly expands its scale without affecting profit margins and debt leverage. Conversely, a downgrade could occur if SGX’s Debt/EBITDA ratio exceeds 2.0x without a credible plan to restore leverage, or if increased competition leads to a significant drop in pre-tax earnings.
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