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3961-3980 of 4131
OCBC Securites - HOLD
TP - S$8.80
Singapore Exchange (SGX) posted record FY07 earnings of S$421.8m, more than doubling that of FY06, with broad-based improvements coming from all fronts. Revenue rose 41% to S$576.2m in FY07, and Securities topped with revenue of S$326m, up 56%, or 57% of total revenue. Management has raised the annual base dividend from 8 cents to 12 cents with effect from FY08. The final dividend for FY07 is a total of 30 cents (2 cents for 4Q + a variable dividend of 28 cents). Trading momentum looks good so far this quarter, with average daily volume of 4.5b units in Jul - another all-time high. Based on the still strong market activities, we have raised FY08 earnings estimates from S$238.7m to S$286.8m. As valuations for its peers have also moved up, we are upping our valuation parameter from 25x to 30x (peer range: 25-37) FY08/09 blended earnings. Based on this, we are raising the fair value estimate for the stock from S$6.20 to S$8.80. We maintain our
HOLD rating on SGX as its net yield remains good at around 3%.NEWS RELEASE
SGX Posts Record Gains for FY2007 Full Year Earnings
Singapore Exchange Limited (SGX) today announced that it has achieved record net profit, return on equity and operating revenue for the financial year ended 30 June 2007. This is the second consecutive year that SGX has registered new high in its earnings.
For the financial year 2007 (FY2007), SGX registered a record net profit after tax of $421.8 million which is more than double the FY2006 $187.6 million earnings. Excluding the one time gains from the disposal of SGX Centre and the write back of its impairment allowance, net profits and return on equity hit all-time highs of $311.3 million and 37.5% respectively.
As an affirmation of SGX?s confidence in the strong underlying growth of our business and commitment to enhancing shareholder value, the annual base dividend will be increased from 8.0 cents per share to 12.0 cents per share from FY2008.
The directors proposed a final dividend per share of 30.0 cents, comprising a base and variable dividend of 2.0 cents per share and 28.0 cents per share respectively. This brings the full year dividend payout to a total of 36.0 cents per share representing 90% payout of current year?s net profit, and is more than double the payout of 16.2 cents per share in FY2006.
In TA, a falling wedge (some will view it, correctly, as a 'rising wedge') indicates the obvious...
But TA is not science... 
9.85 could be the next high...
then the falling wedge is likely to take effect...
My FA side of the brain says SGX is overvalued. PE ratio has shot through the roof-top along with PB. Look at it this way, from the SJ website NTA is $0.54 in May 07. At current pricing, one would be paying >18.7x for each share. But it might be more profitable in the short run to get on the ride with a stringent stop loss just in case ...