Singapore Exchange Limited

Good morning, ladies and gentlemen, and a warm welcome to those joining us here in the auditorium, as well as via the webcast. It's my pleasure to welcome you to SGX First Half FY2026 results briefing. We will begin in a while with a presentation of the financial results by our CFO, Mr. Daniel Koh. And following that, our CEO, Mr. Lo Boon Chye, will present the business updates. We will conclude with a Q&A session with SGX Senior Management. Please wait for the mic to come to you and do identify yourself before you ask your questions. It's now my pleasure to invite our CFO up on stage to present the financial results. Dan, please.

Good morning, everyone. Thank you for joining us today. It is a pleasure to share with you SCX Group's strong set of results for first half FY26. We delivered robust business growth and achieved our highest half-year revenue and earnings. Net revenue excluding Treasury income grew by 10% and adjusted earnings grew by 12%, continuing the strong momentum from the high base in FY25. Total net revenue grew by 8%, while adjusted expenses were up 4%. We will go through the detail in later slides. Our equities, cash, or SGX stock exchange revenue achieved a solid 16% growth, powered by market optimism and elevated investor interest from the EMRG tailwinds. Our currency and commodity derivatives segment demonstrated a strong growth trajectory led by IronOil's record half-year volume. SGXFX net revenue increased by 8%, with a record average daily value of US$180 billion, driven by sustained client acquisition and increased platform adoption. Treasury income declined mainly due to the global rate environment and collateral currency mix. We remain confident in delivering the medium-term targets that we set out at the start of FY25. SGX's multi-asset strategy with diversified revenue streams positions us well to deliver the 6-8% CAGR in top-line organic growth excluding Treasury income. To sustain this momentum, we continue to reinvest for growth while maintaining cost discipline. There is no change to our guidance for expenses and KFAX. We are confident to maintain the sustainable and growing dividends commitment with the incremental 0.25 cents every quarter to the end of FY28. The Group Strong Balance Sheet also enables us to capitalise on business opportunities that will drive long-term growth. Now, let me walk you through the headline financials. Group net revenue increased by 7.6% to $695 million. Group expenses, on an adjusted basis, increased by 3.8%. while adjusted group NPAT increased by 11.6% to $357 million. Our margins also grew with adjusted operating profit margin and adjusted NPAT margin improving by 1.4 and 1.8 percentage points respectively. As mentioned, SGX Group's robust performance this half year continued the momentum from an already strong FY25. Other than a 10% year-on-year growth for net revenue XTI, there was also an 8% growth half-on-half. This revenue was backed by sustained volume growth across each of our diversified multi-asset businesses, namely derivatives including commodities, SGX Stock Exchange SGX FX Our overall derivatives DAV grew 8% from a high base last year when the China stimulus announcements drove record high volume on China A50 contracts. This growth built on the strong momentum in the second half of FY25 when global volatility surged due to uncertain trade policies like from Liberation Day. This was underpinned by strong client demand for SGX derivative products and the increase in our global client reach. The SGX Stock Exchange saw a remarkable growth of 20% to $1.51 billion, the highest in five years. This was driven by the holistic measures by EMRG and SGX alongside growing investor interest. The SDI posted a 23% one-year return, outperforming most ASEAN peers. The SDAV for small and mid-caps surged by over two times, outpacing the SDI30 and contributing nearly half of the overall SDAV growth. Additionally, ETS and Singapore Depository Receipts or SDRs contributed more than 10% to the overall SDAV growth. The SGXFX business continued to grow consistently since inception. Average daily value increased by 32% year-on-year, outpacing other peer exchanges, benefiting from an enhanced platform and a broader client base. Let me now elaborate on the Group's net revenue performance across our four operating segments. Our FICC revenue grew 20 million, or 12%, accounting for 26% of total revenue. The commodities franchise achieved record volumes across iron ore, dairy products, and petrochemical contracts. Total volume grew 24%, with iron ore leading the revenue growth, benefiting from a broader customer base and improved market sentiment from the China stimulus. I had touched on the strong volume growth of SVXFX earlier. We saw faster growth in lower yielding swaps, which increased in demand in our clients' portfolios. The equities cash segment revenue grew by $31 million, or 16%, and contributed 32% to our total revenue. This was mainly driven by the higher SDAV as mentioned earlier, which increased trading and clearing revenue by the same magnitude. With the higher trading activities, we also saw more income from securities settlement. Equity derivatives revenue decreased by 10 million or 6% and accounts for 24% of total revenue. This was mainly due to lower treasury income. Notably, though, total equity derivatives volume remained comparable at 91 million contracts, even with a high base last year. Platform and others revenue increased by 8 million or 7%, primarily due to higher co-location sales and repricing of data and connectivity services. This segment has grown at a steady average rate of 2% over the past five halves and now accounts for 18% of total revenue. Moving on to expenses, we continue exercising cost discipline. The adjusted expenses increased by 3.8%. The impact of our planned investments in sales and product capabilities and platform modernization will skew towards the second half. Full year expense and capex guidance for FY26 remain the same as previously communicated. Staff costs for the first half increased by 4 million or 2.6%, primarily due to higher headcount. Technology expenses, depreciation and amortization were largely comparable. Other expenses increased by $5 million mainly due to more professional fees and prior FSDF grants received for the SGX FX business. Adjusted earnings reflect our underlying core performance by excluding non-cash adjustments. First is a net fair value gain of $6 million mainly related to the transaction where Seven Rich Fund entered into a binding agreement to sell trading technologies in July 2025. Second, we took a $15 million impairment due to the lower-than-expected performance from Scientific Beta. Lastly, we have an adjustment of $5 million mainly for the amortization of purchased intangible assets. Our balance sheet remains robust and continues to provide us with a solid foundation to pursue future growth opportunities while continuing to deliver shareholder returns. Moody's reaffirmed our AA2 rating in September 2025, the highest among exchanges rated by Moody's. Our leverage ratio is at a healthy level of 0.8 times due to improved margins. The Board of Directors has declared an interim dividend of $0.11 per share, consistent with the dividend growth trajectory previously announced. This brings the total dividend in the first half of FY26 to $0.2175 per share, marking a growth of more than 20% compared to the same period last year. We are confident in our ability to deliver sustainable and growing dividends with a steady increase of 0.25 cents every quarter to FY28 as previously guided. With that, let me now hand over to Gun Chai, our CEO, who will deliver the business updates. Thank you.

Good morning everyone and thank you for joining us today. As Dan highlighted, we delivered strong results in first half FY26 with broad-based growth across most business segments. This performance reflects disciplined execution of our multi-asset strategy anchored by a strong client-centric approach and driven by three strategic focus areas. First, scaling our FX business. Second, expanding and strengthening our derivatives and commodities franchise. And third, accelerating growth in our stock market. With this multi-asset strategy firmly in place, we are confident in achieving our medium-term revenue growth of 6% to 8%, excluding treasury income. Let me now take you through each of our focus areas. Our SGX FX franchise or OTC FX business has been expanding at pace. Average daily volume has risen at a CAGR of 39% since we started 3 years ago, reaching a new high of US$180 billion in first half FY26. As market volatility persists, more participants are turning to our platforms to manage FX risk effectively. We expect this growth momentum to continue, with increasing uplift to our bottom line. This supports our medium-term ambition for SGX FX to deliver a mid to high single-digit EBITDA contribution. To sustain this trajectory, we are sharpening our focus on product and platform innovation. We continue to strengthen our FX data and analytics offerings to meet evolving client needs, helping clients to improve transparency, execution quality and risk management across the entire trading workflow. In parallel, we are enlarging our capabilities to support broader multi-asset trading, including new EM or emerging market products, such as Latin America non-deliverer forwards or NDFs. We are also enhancing workflows to better serve increasingly diverse client strategies. This growth is underpinned by the depth and diversity of our global client network with rising buy-side participation from global hedge funds and asset managers. Our client engagement has also received industry recognition with SGXFX named world's best FX exchange and world's best solution for FX NDFs by Euromoney. With these foundations in place, SGXFX is well positioned to remain a key growth driver for SGX Group. Turning to derivatives and commodities, our overall franchise is gaining solid momentum. Even after an exceptional FY25 driven by macro volatility, we achieved our highest half yearly DDAV of 1.35 million contracts. International participation remains strong, with T plus 1 volumes holding above 20% in first half FY26. Our FX and rates derivatives delivered 18% DDAV growth year-on-year as more global participants rely on SGX for FX hedging. Beyond our flagship Indian rupee and renminbi contracts, our Korean won futures saw stronger trading activity amid heightened global volatility and a resilient Korean equity market, underscoring the value of our listed FX futures shelves, which provides deep and liquid access across Asia's major currencies. Our commodity franchise recorded diversified growth across our key contracts led by iron ore. Alongside strong performance in our flagship iron ore and our freight contracts, volumes in dairy and petrochemical derivatives continue to grow as open interest reach new highs. Over the years, our rubber contracts have attracted rising participation from financial players who now account for over 60% of daily volumes supported by increasing interest from non-Asian investors. Reinforcing its role as the global pricing benchmark for natural rubber, Our launch of T Plus One Night Trading on 26 January this year has drawn promising early interest, particularly from participants seeking greater flexibility in round-the-clock risk management. In equity derivatives, our volumes remain resilient. Our China A50 futures registered a 2% year-on-year increase in volumes despite a high base from last year's record activity following China's stimulus announcement. This resilience affirms the A50's enduring leadership as the most liquid international futures for Chinese equities and continued investor demand for SGX Asia access platform. Building on this momentum, We are advancing innovation across our derivative suite. As volumes in equities, FX and commodity derivatives grow, we are expanding our offering to meet changing investor needs and diversify our client base. In first half FY26, we extended our multi-asset platform with more institutional-grade tools such as the launch of the world's first regulated exchange-clear crypto perpetual futures, bringing SGX-trusted market infrastructure transparency and robust margining into one of the most actively traded digital assets instruments. In this evolving rates landscape, we expanded our offering with the launch of the new 20-year mini Japanese government bond futures, introduced at a pivotal moment as Japanese rate environment shifts. Together with our 10-year JGB and 3-month Tona futures, This addition enables investors to express views and manage risk across the Japan rates curve with greater precision. Taken together, this development highlights the resilience of our multi-asset franchise and positions us well to capture the opportunities ahead. Lastly, on the stock exchange business, momentum has been robust. and sustain, with increased vibrancy in the ecosystem. This reflects the longer-term strategy our equities team has been executing. One that is not just dependent on market cycles, but on building a structurally stronger market over time. Through the first half of FY26, market participation deepened meaningfully. Average daily turnover rose 20% year-on-year to S$1.51 billion, the highest level since early 2021. Retail participation in cash equities rose to a four-year high as investors increasingly pursued differentiated opportunities across STI constituents and small and mid-cap companies. liquidity has increased in tandem with this heightened investor interest. The SDI continues to serve as a key anchor supported by steady domestic and international flows. At the same time, trading activity has broadened across sectors, driving higher turnover beyond the SDI and contributing to a more balanced liquidity profile across the market. Notably, interest in mid-cap and growth-oriented companies rose significantly, with institutional investors recording net purchases of SING$415 million in small and mid-cap stocks over the year. This was partly boosted by last September's launch of the IH Singapore Next 50 Index, which tracks the next 50 largest companies beyond the STI constituents. Liquidity also benefited from higher IPO activity. In first half FY26, SGX Stock Exchange led Southeast Asia in terms of IPO funds raised with nearly S$3 billion raised. Looking ahead, our IPO pipeline continues to strengthen with a healthier outlook compared to six months ago. Beyond liquidity, we are enhancing market connectivity and building partnerships globally. Two major initiatives were announced in late 2025, first with the US. Together with Nasdaq, we announced the Global Listing Board , designed to allow eligible high-growth companies to tap both Asian and US investor bases through a streamlined dual listing framework. As we prepare to launch the GLB later this year, we are seeing more new economy companies engage with us earlier, encouraged by the possibilities that GLB can unlock. This is widening the funnel and gradually reshaping the profile of companies looking to list here. Second, with China. The Monetary Authority of Singapore and the China Securities Regulatory Commission has expressed support for Chinese corporates or A-share companies to secondary list in Singapore. There is now a clear fundraising pathway for eligible Shanghai and Shenzhen listed companies to raise capital on SGX while maintaining their A-share obligations. We look forward to welcoming new listings under these two initiatives in 2026 and are progressing on the supporting frameworks. Beyond cash equities were widening the avenues for investors to express their views on Asia's team through a wider range of products such as ETFs and SDRs. ETF activity remained robust, supported by new launches and steady inflows, with assets under management reaching SING dollars $18 billion at the end of 2025. Burned by rising investor interest and steady performance in the Singapore stock market, STI ETFs saw AUM rising to SGD $3.7 billion. We also extended regional and thematic exposures through SDRs covering Hong Kong, Thailand and most recently Indonesia, giving investors convenient and cost-efficient access to these markets. Alongside product expansion, we are also strengthening our market structure. SGX Recco is consulting on proposals to reduce bought lot sizes for higher priced stocks and to modernise our post-trade framework through broader adoption of broker custody accounts. Both aim at enhancing accessibility, participation and market efficiency. Collectively, these developments point to a clear trajectory, a broader and more active investor base, deeper liquidity across market segments and stronger cross-border linkages enhancing Singapore's position as a leading marketplace in the international arena. First half FY26 demonstrated the strength and resilience of our multi-asset strategy in FX, derivatives and our stock market. They underpin our confidence in delivering our medium-term revenue CAGR growth target of 6% to 8%, excluding Treasury income, through disciplined execution and a clear focus on what matters. First, by deepening engagement with new and existing clients across all our businesses. Second, by delivering product innovation and next-generation market infrastructure. And third, driving a vibrant stock market ecosystem with our continued initiatives and momentum. Thank you. My colleagues and I will now take questions. Can we have the first question? Yeah, I think I saw your hand up first, Nick, and then we can have a hush, and then we'll take a question online after that.