https://www.reuters.com/article/ind...-move-triggers-earnings-worries-idINKBN1FW06E
#Business News
February 12, 2018 / 3:24 AM / Updated 15 hours ago
Singapore Exchange shares tumble as India's move triggers earnings worries
Anshuman Daga
SINGAPORE (Reuters) - Shares in Singapore Exchange Ltd (SGX) plummeted as much as 9 percent on Monday as brokers cut their earnings estimates after a move by India’s three main bourses to stop licensing their indexes and securities to foreign exchanges.
The unexpected decision to prevent trading from migrating abroad will especially hurt SGX’s Nifty 50 index futures, which is the exchange’s flagship Indian equity derivatives product and accounts for about 12 percent of its total derivatives trading volume.
“SGX’s edge and key proposition to clients was the ability to invest in multiple Asian derivatives products in one venue,” Goldman Sachs’ analysts said in a report.
“Cross-margining and other benefits have kept client flow sticky and fostered incremental demand. With the loss of the Indian product there could be lower volumes in other derivatives products,” Goldman said. It cut its rating on SGX to “sell” from “buy” and reduced earnings estimates by up to 11 percent for 2018-2020.
JPMorgan downgraded its “overweight” rating on SGX and UBS placed its “buy” rating under review.
#Business News
February 12, 2018 / 3:24 AM / Updated 15 hours ago
Singapore Exchange shares tumble as India's move triggers earnings worries
Anshuman Daga
SINGAPORE (Reuters) - Shares in Singapore Exchange Ltd (SGX) plummeted as much as 9 percent on Monday as brokers cut their earnings estimates after a move by India’s three main bourses to stop licensing their indexes and securities to foreign exchanges.
The unexpected decision to prevent trading from migrating abroad will especially hurt SGX’s Nifty 50 index futures, which is the exchange’s flagship Indian equity derivatives product and accounts for about 12 percent of its total derivatives trading volume.
“SGX’s edge and key proposition to clients was the ability to invest in multiple Asian derivatives products in one venue,” Goldman Sachs’ analysts said in a report.
“Cross-margining and other benefits have kept client flow sticky and fostered incremental demand. With the loss of the Indian product there could be lower volumes in other derivatives products,” Goldman said. It cut its rating on SGX to “sell” from “buy” and reduced earnings estimates by up to 11 percent for 2018-2020.
JPMorgan downgraded its “overweight” rating on SGX and UBS placed its “buy” rating under review.
