FX and Commodities Drive SGX Revenue Growth

Singapore Exchange (SGX) has reported increased net profits and revenues for its financial year 2023, driven largely by growth in its FX and commodities business lines. SGX says adjusted net profit was SGD 503.2 million, up 10.3% from the previous year, and total revenue increased 8.7% to SGD 1.194 billion.

The exchange group’s FICC business delivered SGD 338.2 million in revenues in FY23, a 33.8% increase from 2022 and 28.3% of total revenue – up from 23% in FY22. Within this, however, fixed income revenues actually declined 31.8% to SGD 8.3 million, but currencies and commodities’ revenues increased by 37.1 to SGD 329.9 million.

Commodities was the stand out performer, with a 35.4% increase in trading volume to 41 million contracts, however currency derivatives volumes were also up a very healthy 28.7% to 36.7 million contracts. OTC FX average daily volume from SGX’ BidFX, MaxxTrader and CurrencyNode businesses, rose to $75.8 billion per day, up 7.3% on 2022.

SGX highlights iron ore futures and USD/CNH FX futures, as well as higher contribution from OTC FX, as notable performers.

“Our financial performance continues to demonstrate the strength and resilience of our multi-asset business in a challenging macro environment,” says Loh Boon Chye, CEO of SGX Group. “Global investors are increasingly turning to our trusted international marketplaces to invest and manage portfolio risk, with our revenue growth primarily driven by our derivatives business.

“Our currencies and commodities franchises have grown substantially, achieving record volumes while we cemented our foothold as the preferred venue for Asian equity derivatives,” he continues. “With the positive momentum in our OTC FX business, we expect to achieve our goal of US$100 billion average daily volume by FY2025 or earlier. While the unprecedented rapid tightening of monetary policies around the world has impacted capital-raising activities globally and in Singapore, we are optimistic that our pipeline of listings will come to market when conditions improve.”

Commenting on the outlook for FY2024, Loh says, “To pursue further growth, we will scale our multi-asset offerings globally through our network, partnerships and geographical expansion of client coverage. Asia is at the centre of global economic growth, and SGX Group is at the heart of international capital flows to this part of the world. We remain on track to achieve high-single-digit revenue growth.”