Average trading values are just $1.7b.
According to DBS, the Singapore market has been buoyed by strong trading volumes driven by small-cap stocks, lifting average daily trading volumes to 5.3bn in 1QCY13. Such high trading volumes should have pushed securities revenues to its peak. But, as volume-to-value ratio has dipped to its lowest point at 0.32, average trading values only stood at S$1.7bn (1QCY12: S$1.4bn; 4QCY12: S$1.2bn).
Average trading values have increased q-o-q, implying securities revenues should improve q-o-q, probably also aided by lower capped trades (contract values above S$1.5m).
Derivatives revenues to slightly dampen. Total futures and options trading volumes surged in1Q13 but we gather that derivatives revenues could continue to be hurt by lower yielding products (similar trends as in previous quarter). We are hence cutting our derivatives revenues forecasts by 4-9% for FY13-15F.
Upside risk to earnings if appetite shifts back to higher yielding products.
FY13-15F earnings cut by 10-13%. We lowered our earnings estimates for FY13-15F after trimming forecasts mainly from derivatives and other revenues.
Average daily trading volumes are adjusted upwards but average trading values are relatively unchanged. We adjusted our volume-to-value ratio lower to 0.45 (1QCY12: 0.67; 4QCY12: 0.57).
3QFY12 results released this evening. We estimate S$173m for revenues, S$74m operating expenses and S$84m net profit. As usual, a base DPS of 4 Scts for the quarter.
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