RPT-PREVIEW-Derivatives seen boosting Singapore Exchange Q2
(Repeats, unchanged, story first transmitted on Jan. 11)
* What: Q2 results
* When: Tuesday, after 5 p.m. (0900 GMT)
* Derivatives trade to lift profit amid volatile markets
SINGAPORE, Jan 11 (Reuters) - Singapore Exchange (SGXL.SI), Southeast Asia's top bourse operator, should have pushed up its October-December profit by more than two-thirds on the back of strong volumes in derivatives trading as edgy investors rushed to hedge positions in fickle stock markets.
Analysts said a firm derivatives business should outweigh a seasonal slowdown in securities trading, further exacerbated by global market turbulence, but stock market skittishness may erode SGX's earnings in coming quarters.
"The derivatives side looks quite impressive. There'll be a slowdown in securities trading, but SGX will not be held ransom by that," said CLSA analyst Thilan Wickramasinghe.
SGX is expected to post net profit of S$107 million ($75 million) for its October-December fiscal second quarter, a poll of three analysts shows, up 68 percent from S$63.7 million profit a year ago.
The exchange said this week its derivatives trading volume rose 21 percent last year to a record 44 million contracts.
Analysts said SGX may not yet have seen the bottom of the outward rippling from the U.S. subprime crisis, with investors still jittery about the health of the world's largest economy.
"Market conditions only started to deteriorate at the end of the quarter. What we're seeing now may not be fully reflected in the results," said Morgan Stanley analyst Matthew Wilson.
SGX, which ranks behind Hong Kong Exchanges and Clearing (HKEx) (0388.HK) among Asia's listed bourses, enjoyed record quarterly profit last year as optimism in domestic growth drove a surge in trading appetite for property and banking counters.
In the first 10 months of 2007, SGX shares more than tripled to a record S$17.20, helped by speculation SGX may be a takeover target amid mergers and acquisitions in the industry.
The benchmark Straits Times Index .FTSTI gained 31 percent during the same period.
Trading at nearly 25 times forecast earnings, SGX is cheaper than HKEx at 37.6 times. Australian Stock Exchange (ASX.AX), Asia's No.3 listed bourse, trades at 24.4 times. (Reporting by Chua Baizhen; Editing by Jan Dahinten)
