Singapore Exchange Limited

Good morning, ladies and gentlemen, and to those viewing via the webcast. A very warm welcome to SGX Group's FY2025 full-year results briefing. We will begin today's session with a presentation of our financial results by our CFO, Mr Daniel Koh. Following that, our CEO, Mr Low Boon Chye, will share the business updates. We will conclude with a Q&A session later on with SGX Senior Management. Please wait for the microphone to reach you and do identify yourself before you ask any questions. It is now my pleasure to invite Daniel up on stage to present the financial results. Dan, please.

Good morning, everyone, and thank you for joining us today. It is a pleasure to share with you SGX Group's FY25 financial highlights of what has been a remarkable year of growth and momentum. As we celebrate our 25th anniversary this year, I'm glad to present a very strong set of results. Our multi-asset strategy has enabled us to achieve the highest revenue and net profit since listing. We delivered strong and sustained business growth across all operating segments, reinforcing SGX's position. Thank you. Our derivatives franchise achieved robust growth with the highest ever annual volumes in FX, commodities and China A50 index futures. One in five derivative contracts is now traded in the T1 session, which is a clear testament to our global appeal and almost round-the-clock accessibility. SGXFX, which is our OTCFX business, delivered solid performance with the year-on-year ADV growth outpacing peer exchanges. We continue to drive growth through disciplined capital allocation. The board has proposed raising the final quarterly dividend to $0.105 per share, up 17% year-on-year. This leads to a 9% increase in our FY25 total dividend, up 3 cents to 37.5 cents per share. Furthermore, given our confidence in the Group's long-term sustained prospects, the Board proposed a steady dividend increase of 0.25 cents every quarter from FY26 to FY28, which I will elaborate on subsequently. First, let's look at some highlights of FY25. Group net revenue increased by 11.7% to $1,298 million, driven by broad-based growth across all operating segments. Group expenses on an adjusted basis increased by 1.6%, while adjusted group NPAT has increased 15.9% to $610 million. Our margins also grew with adjusted operating profit margin and adjusted NPAT margin improving by 4.2 points and 1.7 points respectively. As mentioned earlier, top-line growth was broad-based with highest contributions from cash equities, derivatives and SGXFX. Our equities cash segment delivered impressive growth fueled by strong investor enthusiasm as the STI posted a 19% one-year return, outperforming other regional benchmark indices. Net revenue increased by 62 million, or 19%, and SDAV increased 26.5% to 1.34 billion, the highest in four years, with year-on-year growth outperforming our ASEAN peers. This performance was supported by increased investment flows from both institutional and retail investors into all segments, including index stocks, REITs, and small and mid-caps. Our derivative franchise achieved several record volumes across currencies, commodities, and equities, driven by our focused efforts in expanding client coverage and deepening liquidity. SGX remains the primary venue for global investors seeking exposure across Asia's dynamic markets. Total net revenue from our derivatives suite grew 44 million, or 9%, driven by 17.2% growth in derivatives daily average volume across all asset classes. The growth was also supported by our efforts in expanding client participation in the T1 session and driving cross-selling. Our SGXFX business continued its strong momentum. Net revenue grew 23 million, or 25%, with average daily volumes increasing by 28% to US$143 billion. This was fueled by our continued efforts to expand and deepen our client base across both buy-side and sell-side segments. The business contributed around 5% to Group EBITDA for the full year compared to 3% a year ago on improved operating leverage. Let me now elaborate on the Group's net revenue performance across our four operating segments. Our FICC segment grew 25 million or 8.6% and accounted for 25% of total revenue. I had touched on OTCFX earlier. For the exchange-traded currency segment, we remain as Asia's largest regulated currency futures exchange by volume and number of product offerings. These contracts hit record monthly volumes several times during the financial year. reflecting strong market demand and the effectiveness of our platform supporting clients in managing their currency risk. For the commodity segment, the increase in revenue was diversified across iron ore, rubber and petrochemical contracts. The equities cash revenue growth was driven by the higher SDAV mentioned earlier and higher average clearing fees. The segment grew $62 million and contributed 30% to our total revenue. Equity derivatives revenue increased by $42 million, or 13.8%, driven mainly by the volume increase in our flagship FTSE China A50 and Gift Nifty future contracts. This segment contributed 27% of total revenue. Platform and others' revenue increased by 7 million, or 3%, primarily due to higher co-location sales and repricing of data and connectivity services. The segment accounted for 18% of total revenue. Moving to adjusted expenses, our focused cost discipline, with 1.6% increase year-on-year, or 9 million, will enable greater flexibility for investments in FY26. Staff costs increased by 9 million, or 3%, primarily due to higher variable bonus provision in line with higher profitability. Technology expenses, depreciation, amortization, and others were comparable year on year. Adjusted expenses are $12 million lower than reported expenses because this excludes the amortization of intangible assets and one-time fees. Adjusted earnings reflect our underlying core performance by excluding non-cash adjustments and one-off items which I will further elaborate upon. First is the net fair value gain of $48 million, mainly from our investment in a private equity fund managed by Seven Ridge, which holds the company Trading Technologies. The fund entered into a binding agreement to sell TT on 24 July 2025. The transaction is expected to complete upon fulfillment of conditions required. Our investment is recorded at fair value. Second, we took an $8 million impairment of purchased intangibles and the associated companies due to underperformance. Given their non-cash nature, these are removed here for the purpose of adjusted earnings. Third, we recognised a one-off gain of $8 million on the sale of our financial investment in the Philippine stealing system, which we had already announced in the first half 25 results. Finally, we had a further adjustment of $10 million from the same items I mentioned in the adjusted expenses. Our balance sheet is robust, positioning us well to pursue future growth opportunities and deliver returns to shareholders. Gross debt decreased $40 million due to, firstly, US dollar bond revaluation as the US dollar depreciated, and secondly, lower lease liabilities. Our leverage ratio remains at a low level of 0.8 times, An interest coverage ratio decreased to 54 times from 77 times as explained in our first half results on the higher interest expense upon refinancing. Our strong balance sheet is a testament to our financial discipline and resilient operating model. Let me now focus on our capital management principles. how we strategically deploy resources to fuel organic growth, future-proof our business, and deliver sustainable shareholder returns. Our top priority remains driving top-line organic growth. With a medium-term revenue growth target of 6-8%, we are actively reinvesting in product innovation, sales capabilities, and technology to improve our clients' trading experiences and expand our market reach. In line with this growth ambition, FY26 expenses are expected to rise by 4% to 6%, consistent with our guidance for a low to mid-single-digit percent increase over the medium term. Beyond organic growth, we will invest strategically to future-proof our business and sharpen our competitive edge through modernising our technology infrastructure for scalability, resilience and innovation. As previously guided, CAPEX investment will be capped at 7% of operating revenue over a cycle. In FY26, we expect to invest 90 to 95 million in CAPEX spending. In M&A, we continue to explore value-accretive bolt-on acquisitions that complement SGX's core strengths. Last but not least, delivering sustainable and growing returns to shareholders remains a cornerstone of our capital management approach. we are committed to total shareholder return while delivering sustainable dividend growth. Given our strong performance this year and reflecting positive growth momentum, the Board is pleased to propose an increase in dividends this year and a continued step up in the next three years. the Board has proposed raising the final quarter's dividend by 1.5 cents to 10.5 cents per share, subject to shareholder approval at the AGM. This marks a 16.7% annualised increase, reflecting the strong earnings growth this year. Total dividends for FY25 will be 37.5 cents per share, up 8.7% from FY24. We are also pleased to announce a steady dividend increase of 0.25 cents every quarter from FY26 to FY28, subject to earnings growth. The chart on the right illustrates how we will continue rewarding shareholders who will enjoy the 7 cents increase and then 4 cents increase in the following years. Our revised dividend proposal underscores our commitment to value creation and disciplined financial stewardship. Thank you for your continued trust and support. With that, let me now hand over to Bun Chai, our CEO, who will deliver the strategic business updates. Thank you.

Good morning, everyone. Thank you for joining us this morning. FY 2025 was a defining year for SGX, marked by our strongest performance on record. We achieved our highest ever revenue and net profit. We brought base growth across all operating segments. This performance was driven by disciplined execution of our multi-asset strategy. Deeper client engagement and targeted innovation across our product shelf. Our results reflect not just operational performance, but the increasing relevance and resilience of our platform. They underscore our growing global connectivity and reinforce our position as Asia's trusted international multi-asset exchange. Let me begin with some highlights from the year. A key driver of our success was our responsiveness in helping global clients navigate a dynamic operating environment. As trade tariffs and geopolitical changes reshape investment flows, our clients turn to our highly liquid solutions to manage volatility and seize opportunities across Asia. Against this backdrop, our directives daily average volume, or DDAV, grew 17% year-on-year to 1.3 million contracts. Volumes traded during our overnight T1 session grew at an even faster pace of 36%, reflecting the increasing usage of our products by global participants. Over the past two years, our T++ volumes have grown at a CAGR of 23%, underscoring our role as a round-the-clock liquidity hub for global investors. The continued growth in our T++ activity reflects our active engagement with the broader client base in the West and beyond Asia. Through our conversations with clients, it was clear that they needed to respond swiftly to global market developments and manage risks more effectively. To support this need, we enhanced trading continuity and intraday liquidity by narrowing the gap between T and T plus 1 sessions for equity derivatives. As a result, our clients now benefit from 15 more minutes of continuous trading in T plus 1 session, a meaningful enhancement especially in volatile market conditions. Our client-centric approach is delivering results. This has been instrumental in broadening product adoption across our multi-asset suite. Moving away from the supply side of our derivative suite, let me now give some highlights on the demand side. In FY 2025, through effective client engagement, 6% of our direct trading accounts added at least one more asset class to their portfolio, a sign of growing confidence in our offerings. This growth highlights the tangible value clients gain from trading multiple products with us, supported by platform-wide margin offsets and capital efficiencies, which help them optimize capital and diversify seamlessly on a single platform. Our cross-selling efforts have resonated strongly with clients who value synergies across asset classes. This is especially evident in our flagship China and India product suites as investors seek broader exposure to Asia's largest emerging markets. We intensify our push on China-themed products, leading to increased adoption of our CNH and INR products alongside our A50 product. Similarly, adoption of our India Suite has strengthened, with more clients trading both our Gift Nifty and Indian Rupee contracts. In FY 2025, trading volumes from both the US and Asia rose meaningfully. This reflects not just macro capital flow trends, but also the strength of our global distribution and client relationships. Our client engagement efforts have also been successful in OTC FX business, where our global reach has expanded to 12 cities and over 200 institutional clients, with increased client adoption and participation Coupled with new product development, average daily volumes for OTCFX rose 28% to US$143 billion, the fastest year-on-year growth amongst peer exchanges. SGXFX is now amongst the top three exchange-backed OTCFX venues by volume, a significant achievement in a relatively short span of time. As a result, OTC FX net revenue rose 25% whilst its contribution to group EBITDA increased from 3% to 5%, reflecting improved operating leverage. While staying ahead of the curve by delivering unique access to multi-asset liquidity, advanced trading workflows and proprietary data, an analytics tool for institutional FX clients. The spirit of product innovation is central to our strategy across our businesses. We are focused on expanding our products with targeted solutions that capture new opportunities. In derivatives, our latest addition was the launch of the Brazilian Real Futures in partnership with B3, marking our first emerging market currency futures outside of Asia. The product has seen healthy traction. In the first month of launch, we hit a peak of 38,000 lots traded in a single day. With competitive spreads, we hold majority of the market share during Asian hours. The Brazilian round futures provide investors with efficient exposure to commodity link strategies. The product also unlocks cross-selling opportunities via the Brazil-China trade corridor and uniquely addresses the liquidity gap for investors in Asia and Europe during Brazilian aftermarket hours. We also expanded our Pan-Asia Index Suite with the launch of the micro FTSE Taiwan Index Futures Contract. This was designed for investors seeking more precise exposure and cost-efficient access to the Taiwan's equity market. a market that has seen heightened activity on the back of structural demand for AI and digitalization. While it is still early days, this launch reflects our responsiveness to emerging investor needs for more granular, thematic access points. We have seen an uptick in volume with June DAV hitting almost 2,000 lots and a single-day high of over 10,000 lots. Lastly, turning to cash equities, another segment that performed strongly in FY 2025. Cash equities contributed 45% of our overall revenue growth this year. SDAV rose 27% year-on-year to $1.34 billion, the highest in four years, outpacing our regional peers. Through our efforts to deepen market participation and the tailwinds from the MAS Equity Review Group to boost vibrancy, we have started to see a significant improvement in stock market liquidity and volumes, not just in the index stocks, but also in the small and mid-caps. At the same time, we have been curating a diverse product shell that enables investors to diversify their portfolios across asset classes, geographies and teams. For example, we've added more names to our Singapore Depository Receipt Suite, enabling investors to implement varied strategies and achieve portfolio diversifications across more regions. We've also expanded our ETF shell to help investors tap into different opportunity sets in Asia. Overall, our ETF market demonstrated strong growth with AUM crossing $14 billion for the first time, a 32% year-on-year increase. Turnover rose 47%, reflecting sustained investor interest and the growing adoption of ETFs as a vehicle for regional diversification. These developments highlight our commitment to innovation and our ability to respond to evolving needs of investors across Asia. Our multi-access strategy, shaped and sharpened over the years, remains a key pillar of our growth. It has powered our growth and will sustain our medium-term momentum. We enter FY2026 with readiness and a clear growth agenda. Our strategy is anchored on a resilient multi-asset business model, which has proven to capture growth opportunities across market cycles. While market conditions may stabilise following the earlier economic uncertainty and volatility, capital flows into Asia are likely to remain strong, and we are well positioned to capitalise on this across regions and products. Let me unpack how we intend to deliver on our medium-term revenue guidance of 6% to 8% CAGR, excluding treasury income. First, we will build on the upward trajectory of our OTCFX and derivatives business while on track to achieve low to mid-teens percentage growth in the OTCFX business with a mid- to high single-digit percentage to group EBITDA contribution. This growth will be driven by enhancing technological functionalities, developing new products, and expanding our proprietary trading algorithms and strategies across multi-third-party platforms to strengthen our order management capabilities. With our focus on product innovation, sales capabilities and technological enhancement, we are in a strong position to increase platform adoption across both buy and sell side clients. Second, we will strengthen the network effect of our core derivatives business. The breadth and depth of our ecosystem, along with the cross-asset synergies of our offerings, allow us to scale efficiently through client acquisition and distribution. We will strategically expand our product shell by advancing our China and India corridors, broadening access across ASEAN II and also other emerging markets. Additionally, we'll continue to pioneer new asset classes to solidify our position globally. Third, we are accelerating the momentum in our cash equity business. Even as our STI hits new highs, we are deepening our product shelf with more innovative products, including exploring the development of new categories of structured products. Our IPO pipeline is also at its strongest in years. On top of this momentum, the MAS Equity Market Review Group serves as a powerful tailwind and catalyst. The renewed focus on Singapore equities has been positive. As the review group initiatives are progressively rolled out, we look forward to the measures laying a stronger foundation for our stock market to grow sustainably. Looking ahead, we will continue to build out a high-quality multi-asset product shelf, identifying opportunities across asset classes, geographies and themes. With a focused sales strategy and targeted client acquisition efforts extending beyond Asia, we are well positioned to deepen client partnerships and grow our global footprint. Finally, to complement our organic growth, we will explore opportunistic investments, including bolt-on acquisitions that are strategically aligned and value-accretive to the group. For our growth to be sustainable, we are concurrently strengthening our platforms through operational excellence to ensure resilience and reliability, scalable technology to support growth for ourselves and our clients and advanced data and analytics to develop value-added services. Overall, these investments will create a future-ready infrastructure to support our multi-asset global expansion. Even as we actively invest to drive sustainable growth, we will manage our expenses with discipline. We are confident of our ability to deliver exceptional and long-term value to our shareholders. Like Dan mentioned, we propose to steadily increase dividends by 0.25 cents every quarter from FY2026 to FY2028, subject to earnings. This reflects our commitment in delivering sustained earnings through advancing our multi-asset strategy. In closing, FY2025 was a milestone year for SGX Group. Our multi-asset strategy is delivering and the foundation is strong for our next phase of growth. We will grow with discipline, innovate with purpose, and execute with clarity, always focused on delivering long-term value to our clients, shareholders, and the broader financial ecosystem. Thank you very much, and my colleagues and I will now take questions, both questions We will have guests in person here and those online. Thank you. Yes, Nick, and then we'll come to you.