Interactive Brokers shares jump as it secures spot in S&P 500
On Thursday, CLSA initiated coverage on Singapore Exchange (SGX:SP) (OTC: OTC:SPXCY), assigning an Outperform rating with a price target of SGD13.40. The firm highlighted the exchange's potential to capitalize on organic derivatives growth, driven by increased market volatility and a robust performance in over-the-counter (OTC) foreign exchange (FX) trading.
Singapore Exchange has seen its average daily trading (ADT) volume in the cash market grow by 24% year-over-year, which has been attributed to the current easing cycle. Additionally, the Monetary Authority of Singapore (MAS) review committee is anticipated to introduce structural growth in both listings and turnover.
CLSA noted that the market has yet to fully account for the derivatives upside, especially considering the heightened volatility expected under a second Trump administration. The firm also pointed to ongoing reviews by MAS, central bank activities, and potential acquisitions aimed at enhancing non-transactional business as key catalysts for growth.
Singapore Exchange is currently trading at a relatively moderate 19 times forward price-to-earnings (PE) ratio, which is below its 10-year average of 21 times. This valuation, according to CLSA, underscores the attractiveness of the stock, leading to the initiation of coverage with an optimistic outlook.
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