No Change to Long-Term View on Singapore Exchange’s Fiscal 2021 Result

Singapore Exchange’s fiscal 2021 result does not change our long-term view on the narrow-moat-rated exchange. Our thesis has been that the derivatives business will be the key earnings driver for the group. In our view, an expansion in their currency business from the acquisition of BidFX and MaxxTrader takes this one step further, providing an added growth prospect and broader diversification to its earnings. Our forecasts are adjusted for the higher operating expense and capital expenditure. We leave our fair value estimate unchanged at SGD 11.20 per share and the stock is fairly valued, after a decline in its share price post the result.