The Development of Unique Derivatives Products Is Key to SGX’s Competitive Position

Singapore Exchange is a fully integrated financial exchange offering listing, trading, settlement, and clearing of equities, fixed-income securities, and derivatives. The number of foreign companies make up close to 40% of total market capitalization of all equity listings, while its equity index-related derivatives volume largely comprises contracts from foreign markets. In our view, the expansion of derivatives products is the key earnings driver going forward, and is expected to preserve the exchange's competitive advantages. We believe Singapore Exchange benefits from its favorable location as a gateway for regional trades. Singapore is a trade-driven economy with low tax rates, a strong legal framework, and stable currency and regulatory regimes. These positive attributes, along with well-developed infrastructure, have led multinational corporations to establish their Asian presence in the city-state.