Singapore Exchange Limited (SGX: S68), or SGX, has been on a roll.
The bourse operator released a sparkling set of earnings for its fiscal 2023 (FY2023) ending 30 June 2023.
Revenue was up 8.5% year on year to S$687.9 million while net profit jumped 26.5% year on year to S$570.9 million.
In line with the strong results, shares of SGX have also hit a 52-week high of S$9.98 recently.
The bourse operator recently unveiled a new corporate structure to spearhead further growth.
Can investors feel confident that the group will continue to see rising profits and dividends?
A new corporate structure
Just last week, SGX announced a new corporate structure to accentuate the strengths of its multi-asset offering.
The new structure will also cater to continued growth across its products and platforms.
Michael Syn, who has been head of equities since July 2019, will be appointed as SGX’s President and the head of the Global Markets division.
All SGX’s asset classes, including equities, fixed income, currencies and commodities except for indices, will be under his purview.
Lee Beng Hong will be the head of Wholesale Markets & Platforms that oversees foreign exchange (FX) technology and workflow solutions.
These two positions ensure that SGX can continue to broaden its multi-asset offerings and expand its geographic reach.
The Indices division will be taken care of by Chief Financial Officer (CFO) Ng Yao Loong who will also help to focus on partnerships to increase SGX’s offerings.
These changes will take place from 1 October.
Launching new products
Even before this corporate re-jig, SGX was already releasing a slew of new products into the market to broaden its offerings.
These new products not only offer investors and fund managers greater choice but also help to cement SGX’s standing as an Asian multi-asset hub.
Back in May, SGX launched Singapore Depository Receipts (DR) under a DR linkage with the Stock Exchange of Thailand.
In August, Structured Certificates (SC) were launched and made available for trading from 30 August.
SC are third-party-issued financial instruments that offer investors yield enhancements and better payoffs if certain conditions are met.
This launch was the first in Asia and greatly helped the group to meet the diverse needs of different investor profiles.
On the Indices front, the bourse operator has also been very active.
Back in June, SGX welcomed the listing of CSOP iEdge Southeast Asia+ TECH Index ETF.
This ETF offers investors access to the digital technology sectors in India and Southeast Asia.
August saw the introduction of the CGS Fullgoal Vietnam 30 Sector Cap Index ETF.
Starting with S$35 million in assets under management (AUM), this ETF offers investors access to the fast-growing Vietnam market.
And just this month, SGX partnered with BlackRock (NYSE: BLK) to list the iShares MSCI Asia ex-Japan Climate Action ETF.
This is the largest equity ETF launched in Singapore with a starting AUM of US$426 million.
Growing its commodities and forex pillars
Apart from introducing new products and beefing up its Indices division, investors should not forget that SGX is also scaling up its commodities and FX divisions.
For FY2023, SGX recorded a 35% year on year jump in daily average volume (DAV) to 160,000 for its Commodities division.
Of note, iron ore DAV hit a record high of 140,000 in FY2023, up from just 99,000 a year ago.
The group also expanded its client base for commodities by including more financial clients.
Over at its FX division, currency futures enjoyed a 28.7% year-on-year growth in volumes with SGX’s CNH and INR contracts among the top 10 traded listed FX futures globally.
SGX’s over-the-counter (OTC) FX franchise recorded an average daily volume of US$75.8 billion for FY2023 and is on track to exceed US$100 billion by FY2025 or earlier.
Get Smart: A potential further increase in dividends
SGX has proven its ability to not only increase its breadth of offerings but has also forged partnerships to further increase its slate of products.
It is an encouraging development and coupled with the recent reorganisation, promises to help spearhead more growth for the bourse operator.
SGX has also communicated its intention to increase its dividend per share by mid-single-digit percentage compound annual growth rate subject to earnings growth.
Investors can look forward to not just higher profits but also potentially larger dividends in the years to come.
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Disclosure: Royston Yang owns shares of Singapore Exchange Limited.