Singapore Exchange Aktie

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 FY 2026 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. Loh Boon Chye, will present the business updates. We will conclude with a Q&A session with SGX senior management. [Operator Instructions]

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 SGX Group's strong set of results for first half FY '26. 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 FY '25. 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 iron ore's record half year volume. SGX FX net revenue increased by 8% with a record average daily value of USD 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 FY '25. SGX's multi-asset strategy with diversified revenue streams positions us well to deliver the 6% to 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 CapEx. We are confident to maintain the sustainable and growing dividend commitment with the incremental $0.025 every quarter to the end of FY '28. The group's strong balance sheet also enables us to capitalize 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 FY '25. Other than a 10% year-on-year growth for net revenue ex TI, 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, and SGX FX.

Our overall derivatives DAV grew 8% from a high base last year when the China's stimulus announcements drove record high volume on China A50 contracts. This growth built on the strong momentum in the second half of FY '25 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 SDAV saw a remarkable growth of 20% to $1.51 billion, the highest in 5 years. This was driven by the holistic measures by EMRG and SGX, alongside growing investor interest. The STI posted a 23% 1-year return, outperforming most ASEAN peers. The SDAV for small and mid-cap surged by over 2x outpacing the STI 30 and contributing nearly half of the overall SDAV growth. Additionally, ETFs and Singapore Depository Receipts or SDRs, contributed more than 10% to the overall SDAV growth.

The SGX FX 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 4 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 SGX FX 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 other revenue increased by $8 million or 7%, primarily due to higher colocation sales and repricing of data and connectivity services. This segment has grown at a steady average rate of 2% over the past -- over the past 5 halfs 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 FY '26 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 noncash adjustments. First is a net fair value gain of $6 million, mainly related to the transaction where 7RIDGE 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 on September '25, the highest among exchanges rated by Moody's. Our leverage ratio is at a healthy level of 0.8x due to improved margins. The Board of Directors has declared an interim dividend of $0.11 per quarter -- $0.11 per share, consistent with the dividend growth trajectory previously announced. This brings the total dividend in the first half FY '26 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 $0.025 every quarter to FY '28 as previously guided.

With that, let me now hand over to Boon Chye, 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 FY '26 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 3 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, our 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 USD 180 billion in first half FY '26. As market volatility persists, more participants are turning to our platforms to manage FX risks 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-Deliverable 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 by site participation from global hedge funds and asset managers. Our client engagement has also received industry recognition with SGX FX name World's Best FX Exchange and World's Best Solution for FX NDFs by Euromoney. With these foundations in place, SGX FX 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 FY '25 driven by macro volatility, we achieved our highest half-yearly DDAV of 1.35 million contracts. International participation remained strong with T+1 volumes holding above 20% in first half FY '26. 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 future 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+1 night trading on 26th 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 similar 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 FY '26, we extended our multi-asset platform with more institutional grade tools such as the launch of the world's first regulated exchange crypto perpetual futures, bringing SGX trusted market infrastructure transparency, and robust modeling into one of the most actively traded digital assets instruments. In this evolving rich landscape, we expanded our offering with the launch of the new 20-year many 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 position us well to capture the opportunities ahead.

Lastly, on the stock exchange business. Momentum has been robust and sustained with interest -- 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 FY '26, market participation deepened meaningfully. Average daily turnover rose 20% year-on-year to SGD 1.51 billion, the highest level since early 2021.

Retail participation in cash equities rose to a 4-year high as investors increasingly pursue differentiated opportunities across STI constituents and small and mid-cap companies. Liquidity has increased in tandem with this heightened investor interest. The STI 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 STI 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 SGD 450 million in small and mid-cap stocks over the year. This was partly boosted by last September's launch of the iEdge 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 FY '26, SGX Stock Exchange led Southeast Asia in terms of IPO funds raised with nearly SGD 3 billion raised.

Looking ahead, our IPO pipeline continues to strengthen with a healthier outlook compared to 6 months ago. Beyond liquidity, we are enhancing market connectivity and building partnerships globally. Two major initiatives were announced in late 2025. First, with the U.S. Together with NASDAQ, we announced the Global Listing Board, GLB, designed to allow eligible high-growth companies to tap both Asian and U.S. investor bases through a streamlined dual listing framework. As we prepare to launch the GLB later this year, we're seeing more new economy companies engaged 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 Asian 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 2 initiatives in 2026, and are progressing on the supporting frameworks.

Beyond cash equities, while 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 SGD 18 billion at the end of 2025, drawn 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're also strengthening our market structure. SGX RegCo is consulting on proposals to reduce [ port lot ] sizes for higher-priced stocks and to modernize our post-trade framework through broader adoption of broker custody accounts, both aimed 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 FY '26 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? Yes. I think I saw your hand up first Nick, and then we can have Harsh, and then we'll take a question online after that.

A couple of questions for me. The first is just on your comments on the GLB. And you spoke about new companies looking at the GLB. I presume there's also companies that are already listed on NASDAQ but may look at the GLB. So I just wonder if you could comment a little bit more about what type of companies you expect to list and sort of the source of those companies? And how big this GLB could be in terms of sort of number of listings on a sort of 12- to 18-month view?

And then I have a secondary question, which is a little bit detailed on the numbers. But in your cash flow, there's about a $420 million gain on the sale of a FVPL or something like that. Could you just tell us what that is? I think it's a distribution. Could you just tell us what that is because it's quite a big cash inflow for you.

Yes. Dan, you can take the second question. On your first question, the partnership with NASDAQ and GLB has clearly drawn companies to have earlier conversations with both SGX and NASDAQ. We hope to get the GLB up and running by the middle of this year. The companies that we're seeing now and on the pipeline are the high-growth new economy companies. And that's what the GLB is created to serve companies with the Asian high-growth being able to tap the Asian and global investor base.

You asked for the 12- to 18-month outlook. This is being set up by the middle of this year. We hope to have some company's IPO on the GLB by calendar year 2026. Discussions, as I said, are earlier, companies are talking to us. Can't quite give you that 12- to 18-month forecast, but we're seeing the pipeline being built up.

Thank you, Nick. The second part of your question, we had invested into a closed-end fund a few years ago and the fund is called 7RIDGE. The asset in that was trading technologies, that was sold. The transaction closed in November 2025. So that -- those numbers you see were the proceeds from that divestment of 7RIDGE.

And so your net cash is now quite high. Have you any plans as to what to do with that?

Yes. So we will -- we are looking at reducing some of the debt, the bonds that we have as they come due for maturity -- that we have 2 bonds that are coming in the next 12 months that we are looking at reducing some of that. Yes.

A couple of questions. One very big picture, Boon Chye. A lot of initiatives on equity market in Singapore. If I look at the equity allocation of Singapore households, it's quite limited. Is there any numerical target or any number, let's say, in a 5- or 10-year period, that as you work with different parts of Singapore to get that number higher directionally and to reach a particular level? And how do we think about that possibility?

First, I think the broader participation across the number of companies beyond just the STI constituents is very encouraging. Secondly, the retail participation, as I mentioned, has reached a 4-year high. All segments of investors, including retail households are clearly important. And there are a couple initiatives going forward. You asked about target, but I think it's important to build the foundation.

The value unlock program, working with the companies is one expect of that, being able to articulate growth, capital allocation, business strategy. And then in the investment part of the equation, there's going to be, first, a move towards or encouraging retail, or CDP direct account holders to move towards the broker custody model that can create multi-market efficiency. And along with that, CDP direct accounts remain available.

And then third, we are doing a lot more in terms of investor education. Then the EQDP program, some of which has been launched has also been able to crowd in the money. So we're hopeful that everybody in the ecosystem playing a part and the momentum that the EMRG has created through the various initiatives and through a more resilient economy, stronger Sing dollar, we hope for a sustained momentum. But all segments of investors are important, including retail. And that's clearly something that we've been working on, but I think this momentum creates the possibility.

Right. But it's not expressly a target or number they're trying to solve for in terms of participation. It is increasing and all of these suggest there's a lot of effort. Probably, we'll talk about in a year or two.

We obviously have our working plan. We don't know where the pools of capital are.

Yes. No, thanks for that. Other one is, on some of the initiatives, we talked about GLB, the other one is, which has talked about a lot in exchanges world, and I'm sure you guys have looked at it, it's a prediction market. There's a lot of different kind of contracts on prediction market, some are frivolous, some are serious. As you would have looked through it over last few quarters and years, what kind of role do you think prediction market can play at SGX, if any? And how do we think about that?

Thank you for the question. This space is evolving. And I think the adoption of events markets in each jurisdiction will be different, has to have clear regulation, obviously, demand ecosystem led. As a market and looking at what SGX offers, particularly in the commodity space, freight, having some risk management tools around outcomes such as C-level, number of possible disruptions is clearly something that I think participants may not want to buy insurance for but are keen to look for some risk management tools. And also given the momentum in our stock market, if we're able to create greater visibility interest around financial metrics of a listed company, I think those are clear possible opportunities to evaluate. Like I said, this has to be with clear regulation demand led and with proper guardrails.

Maybe a question from online participant.

Yes, Boon Chye. A couple of questions, but I'll take Jayden from Macquarie's question first. And on treasury income, the same question from Glenn from Phillip. I'll just combine it. Any more compression expected in the treasury income? And then is there a lag on compression? And are you shifting the duration of your collateral portfolio to lock-in use? So that's question number one. Question number two is on Scientific Beta. Why the decision was taken to impair the amount of $15 million on Scientific Beta? And lastly, is there more dividends to come?

So I may forget the second and third. So I'll ask you. Okay. On the first question, the -- first, I would say, collateral balances increased. And there's a function of more open interest with SGX on our platform. Yes, the treasury income did decline, but that's, as you said, a combination of interest rates, but also a combination of the currency mix. And being an exchange that provide access across Asia, we can expect different currency mix. There's obviously, right now, a lot of focus on where the U.S. interest rates will go, but we also saw Australia hiking interest rates. We could also be in a different rate regime in Japan. So what is important is we continue to have very prudent risk management, looking at various instruments and look at duration to enhance the treasury income. And as said, I forgot the second question.

Second question is on Scientific Beta, the impairment charge?

Given the ongoing dynamic and investors focus between or more on market cap weighted indices versus various specialized indices has led to underperformance of Scientific Beta, thereby, we have taken the decision to impair goodwill. However, Scientific Beta provides acquisition and continues to be, provides and enhance our index capability, allows SGX as a group, including Scientific Beta to engage the asset owners who are clients of Scientific Beta deeper. And that has also allowed us to enhance our data platform collectively. Dividend.

Yes.

That was certainly Jayden.

Yes, correct.

We guided the 12 quarters, 3 years out with a [ $0.25 ] increase for our dividend. We're just 2 quarters into it. As Daniel and I have said, we are committed and confident of delivering what we've guided in terms of the dividend. And obviously, as we continue to grow our business, committed to a 6% to 8% CAGR revenue growth and its cash generation increase, we'll continue to invest organically. We may put on bolt-on acquisition that provides incremental value business proposition. And if there's excess capital, the board and management is very conscious of returning value to shareholders and also creating and making a sustainable and growing dividend over time.

Thilan from Maybank. Just 2 questions. On the value unlock program, can you give us any update on how many companies that have signed up? And when can we start to see some announcements in terms of what some of those value unlock will be? That's my first question.

Second question is on your clearing margin for cash equities this half. We did see an improvement of about 2% or so. Can you give us some indication of what's driving that? Is there a little bit more retail? Or has the mix changed?

So I'll take both questions. So I think the clearing fee, yes, so that 2% increase has been led by an improved participation rate of our full fee paying clients, which is largely institutional and retail, and they come from both segments. The value up -- so the program was officially launched middle of this month. And I would say the response has been quite encouraging. People who have stepped forth to say what are these programs and how can we be involved. So I would say there should be about roughly around 100 companies as of today. That's about 1/6 of the number of listed companies that we have. So I think that's fairly encouraging for 2 weeks.

And Thilan, you would have written quite a few notes on this program. Many of the things that we will work with the ecosystem to assist the companies will be quite different. Some of them clearly would be around capital management issues. Some of them will be around the narrative. It could be great in generating returns, but perhaps the story wasn't that well communicated. So those are the things we have to work through. It will not just be done by SGX alone. We are a platform, but we are able to convene the ecosystem, whether it's the IR experts or whether it's the consultants or whether it's the corporate finance advisory firms, right?

So as the ecosystem we come together, and of course, MES has provided that grants to help encourage the companies to say, look, this is the time to do it. And I think best of all, we have seen examples of companies in Singapore that have done value unlock of value up, and have seen the results in share price appreciation. So I think these are the best examples. And it's not just in the STI companies, but in the next year as well. So that sets an encouraging tone, the template for the next year of companies to say, look, there is something for us to do. There is some assistance. And we do know that the EQDP managers, for example, are looking at some of these companies. And if the right strategies, the right metrics and the thinking can be communicated, then they should be able to expect that some of these managers will have institutional capital or retail capital allocated to them can look at these companies.

This is Yong Hong from Citi. And maybe just one question on the DCI segment. So given the recent development and the Anthropic releases and based on your interaction with your clients, any recent opportunities you see for your DCI segment, maybe especially the Indices business. And relating to that, on your Scientific Beta, would that be further eased to your scientific business? And also, is the impairment done? These are my 2 questions.

On the DCI segment, we saw revenue increase in the connectivity space with higher colocation sales and repricing in October '24 and in the data part of it, as part of our securities trading market platform modernization, we're also undergoing a data lake modernization, which will create capability and functionalities for us to create data and indices that participants will find it useful.

On your question on Scientific Beta. As I mentioned earlier, there are other values that SB bring to the group. The revenue contribution of SB to the group is limited. Even if we were to take further impairment, which is not the case at this point, as the management and the team continues to execute on the plan, even if we do that, it will not be -- it'll be modest given the very strong cash and balance sheet of the SGX Group.

I'm Felicia from The Edge Singapore. Earlier on you mentioned that the IPO pipeline continues to strengthen with a healthier outlook. So at the last results briefing, I think Pol gave a number. It says that you guys have 30 companies in the pipeline. So I was just wondering whether you'd be able to give a figure. And I think the last time you guys mentioned medium term. So do you all have any like more concrete timelines this time?

Yes. So when we mentioned the IPO pipeline at our full year results briefing, roughly now also in August, 6 months ago, say, we mentioned more than 30. Very pleased to say 18 out of 30 has now come to the market. As of now, for our full year calendar outlook, the number of companies on the pipeline is more than what we said before. And we have number of IPOs at this month. I think key is obviously companies, as we've mentioned in our pipeline, companies have engaged advisers working on IPO on SGX. And we hope market continue to be conducive, and we hope to outperform last year.

So the number now is greater than 30, if you want the number. But what Boon Chye mentioned is important, right? We said that 6 months ago, 18 listings have happened since. By the way, it's greater than 30 and growing, right? So as all these deals are happening, we see new additions coming in at a greater pace, and that's encouraging. I think the other aspect to this is not just about numbers for us. The quality and the breadth of it is equally if not more important. We see that across main boards and catalysts nicely spread. And with the global listing board now, we have another very, very exciting tool in the toolbox to cast the net even wider.

And to Nick's earlier question, I think what we are seeing based on the conversation that we're having around the GLB is that it's attracting companies that probably otherwise we might not have seen, consider Singapore as a listing destination. So that's exactly what we were hoping to achieve with it. And then equally in terms of -- Boon Chye mentioned is already around industries, right? So it's been pretty diverse. Technology is part of it. Health care is part of it. Consumer segment, digital infrastructure and of course, also real estate, which is 1 of our strengths. And I think all of this, by the way, we already saw reflected in the type of transactions that have started to come through in the last 6 to 8 months.

That's why Pol is the Head of Global Sales and Origination. You're hearing the word greater from him.

Sorry, I do have 1 follow-up question, and that will be the last one for me. I also was wondering whether you guys have any updates on the bolt-on acquisition front. I think, again, it's something that you mentioned 6 months ago and something that you mentioned just earlier. So I was just wondering whether you've identified any potential targets.

Well, we continue to execute on our organic plans. We'll invest organically. We're also obviously continuing to evaluate areas that can extend our breadth and our debt. And as previously mentioned, the freight industry is undergoing in our view, a digitalization journey. And coupled with our existing strength in freight and commodities, that's an area that we're continuing to try and find bolt-on targets that could complement our business strategy. There is no timeline to that because I think it's important to look at the value, to look at the fit and obviously, market timing.

Just wanted to ask on the GLB. As of now in terms of the conversations that you've had with the companies who are interested, do you see more coming from U.S. trying to come into Singapore? Or is it the other way around where you're trying to bring companies onto the U.S. side?

It will be both ways from what we see right now on our pipeline. Our companies are broadly in this part of the world. But with businesses that could extend into Europe or U.S. So meaning, companies in this part of the world having a global footprint or having more of a regional footprint and clearly looking to tap the Asian and global investors.

So just to follow on. I guess, it's more trying to understand. So do you see this more as issuers that are coming new to the market, there will be -- or are there already listed players who are looking to go over to U.S.?

So this will be for new IPOs, and new IPOs could include companies. They have not been listed. It could also include companies that are already in the U.S. looking to tap this GLB.

Questions online?

Yes. Boon Chye, this is from Shekhar of RHB. I'll broadly put into 2 buckets. One on equity derivatives, broadly stable volumes. What is the action plan to accelerate growth over the next 12 to 24 months? And on securities market, any pricing levels without impacting competitiveness?

Very bullish on the need for risk management across the Asian capital structure. Very bullish on our portfolio mix because it doesn't even yet reflect the market weight of what exists. So if you look at our A50, the number looks very large. But when you normalize the notional, so the A50 notional is 15,000, the Taiwan notional is 100,000. When you normalize this, the upside is a lot. And there are 2 metrics you can look for if you wanted to say what the bogey is. One, today, our market share of A shares on our exchange versus onshore China is about 5%. Secondly, the inclusion rate of China in MSCI equity is about 2.5%, meaning there is no asymptote here. It's all about increased activity in Asian markets, higher volatility, very idiosyncratic moves between markets. There is no Asian lump, China is China, India is India, Taiwan is Taiwan. How quickly can this grow? When I look back at Taiwan, 5 years ago when we did the migration, the notional contract of our Taiwan contract was 40,000. Today, this month, it's 100,000. That's just AI and TSMC. So it's not a static portfolio. And in fact, in this current world order in capital markets, I think we are so well placed because we have currency, we have equity, we have commodities, and we're making a start on a new -- entirely new derivatives category, which is the perpetual payout. It's not about crypto. It's about that payout.

I will reinforce Mike's view. Given the unpredictable and very uncertain environment, this is really an environment where I think investors are more actively managing macro risk, which then translate into asset class risk management. If you look at the IMF 2026 outlook, 4 of the top 10 countries that will contribute to global growth in 2026 comes from Asia. Obviously, the top 2 being China and India, and there's collectively, the 4 countries is going to contribute about 50% of GDP growth.

The second question is any pricing levers for securities market without reflecting competitiveness? Our focus is really to broaden market participation, increase the number of stocks number -- increase the liquidity or number of stocks beyond the STI, more products, better post trade with the broker custody arrangement for the investors who choose to do so. And if that continues to create the flywheel, I think that's better for the overall market in terms of our activity.

Any questions here in the audience? If not, we take 1. Yes, Harsh, and then we have 1 from online.

A couple of follow-ups. You touched on, Mike, on the [indiscernible] futures as a contract, and it's more a proof of concept. Where are we in that journey? And how -- by when do you think you can get enough of data or comfort to then broaden out into, let's say, gold or some other contracts?

The design choice of what we delivered was to go through existing rails because that's how you address your current customer network. But there are 2 specific things that need further adoption. One is clearly setting up the fact that it's not -- it's an indefinite future. It keeps rolling. And it has a daily funding, right? So these are the 2 important things. And we needed to wait for the right asset class to come along where there was an ecosystem that said, I can do this. So the evidence that we have since launch for Bitcoin and [ Ethe ] has been very promising. It's mostly luck because of the environment. So what we've seen is that the most important thing to track is the micro structure. How liquid is it? And actually, the results are very encouraging. Most of the volume is in Asian hours, hypothesis, number one. 70% of the stuff trades in Asia, the trading happens out of Asia, that's what we've seen.

Number two, the funding rate is actually tracking the nontraditional crypto exchanges. It is not tracking the U.S. ETFs. It is not tracking the U.S. Bitcoin futures, meaning it is the regulated mirror of what you're seeing on the unregulated exchanges. So that is very promising. Thirdly, this funding rate is very responsive. It went up a lot when Bitcoin went to 85,000, 87,000, and guess what, in the past week or so, it is now negative. So it works. It does what it says on the tin. Our task here going forward is to get more institutions, clearing members and primes to onboard this onto their shelf, right? We already have a number of pioneer technology vendors and clearing members, and they are very crypto-native in nature, but we need to hit the mass customer network where our strength lies.

We'll take 2 more questions. One here and then 1 online.

I am [indiscernible] The Business Times. I wanted to circle back on the IPO pipeline that you mentioned. So would you say it's better than the first half of your financial year?

I would say the pipeline has improved, yes. That's what we said. Notwithstanding the good momentum that we are carrying across from the first half of the financial year. But you need to understand, right, these things never happen in a straight line. There's a bit of seasonality in IPO activity as well. So it's normal for the first quarter to be a little bit more quiet as companies prepare our full year financials. But overall, as we look -- continue to look at that sort of medium-term window, we're very, very confident.

All right. I also wanted to clarify whether do you see like more mean bought applicants or more catalyst applicants?

Quite equally split.

And actually, last year, you said that 2025 was a transitional year for the [ board ], right? So do you think -- how do you describe 2026 then?

Transitional year?

It's transitional year. That's what Pol said last year.

Yes. So I mean it was very clear. If you look at the calendar year 2025, the first half and the second half were 2 different worlds. We're now in the new world, and we'll keep building up on that momentum. I think if you just generally look at market conditions that are out there, pretty favorable and not just for us, that is globally, but I think there are certainly elements that play to the strength of us here in Singapore and of Asia as a region.

We see the supply coming through, right? There is many, many companies out there in this region that fit right in our sweet spot that need to create liquidity for their shareholders that need capital for growth. So -- from a supply perspective. And then we've, of course, worked tremendously hard with many people here in the ecosystem in identifying some of the pain points and coming up with these initiatives that have been rolled out following the review group that I think are going to be very meaningful in creating an even better environment for us. And I think the deployment of EQDP funds is a very good example of that. The regulatory changes that we've started to make and indeed also the global listing board, for example.

I have another question for Boon Chye. It would be very quick. For the Equity Market Implementation Committee, do you have any more details you can disclose at this point?

Not at this point, we hope in the weeks ahead to announce the formation of the -- to announce the committee members and then lay out our plans forward.

One last quick question, I think, maybe for Boon Gin. Could you kindly elaborate on the reduction of port lot size from 100 shares to 10 shares? Will it extend beyond the initial companies that have been identified so far? And that's from a private banking sector.

Yes. So I think we have put out that console and taking into balance the various factors, we think that we start off with $10. And I think that is going to be a good start because it represents companies or blue chip companies that can be more accessible to a wider population. I would say that the unitization way of breaking down the ballot size, it's not new to us. We did that in the ETF market in 2022. And we have seen quite good activities in ETF market clearly, and we have seen how investors are able to access the higher-priced ETFs and being able to do that. I mean, GOL is an example. It is trading about SGD 600. So we have seen activities in that. And I think that has helped. Of course, I won't be able to definitely extrapolate, but I think making our stock market accessible with -- for higher price shares to a much broader population is part of our goal for higher retail participation in this market.

Okay. With that thank you very much, everyone, for your presence and participation. Thank you.

Good morning, ladies and gentlemen, and to those viewing via the webcast. A very warm welcome to SGX Group's FY 2025 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. Loh Boon Chye, will share the business updates. We will conclude with a question-and-answer 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 FY '25 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 as a trusted multi-asset platform for clients raising capital, seeking investment opportunities and managing risks.

Revenues of equities cash, effectively our stock exchange, surged by 19%, driven by robust investor interest and increased investment flows. Our derivatives franchise achieved robust growth with the highest-ever annual volumes in FX, commodities and China A50 index futures. One in 5 derivative contracts is now traded in the T+1 session, which is a clear testament to our global appeal and almost round-the-clock accessibility. SGX FX, which is our OTC FX 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 FY '25 total dividend, up $0.03 to $0.375 per share. Furthermore, given our confidence in the group's long-term sustained prospects, the Board proposed a steady dividend increase of $0.0025 every quarter from FY '26 to FY '28, which I will elaborate on subsequently.

First, let's look at some highlights of FY '25. 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 SGX FX. Our Equities cash segment delivered impressive growth, fueled by strong investor enthusiasm as the STI posted a 19% 1-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 4 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 T+1 session and driving cross-selling. Our SGX FX business continued its strong momentum. Net revenue grew $23 million or 25%, with average daily volumes increasing by 28% to USD 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 4 operating segments. Our FICC segment grew $25 million or 8.6% and accounted for 25% of total revenue. I had touched on OTC FX 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 Commodities 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 colocation sales and repricing of data and connectivity services. This 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 FY '26. 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 at $12 million lower than reported expenses because this excludes the amortization of intangible assets and onetime fees. Adjusted earnings reflect our underlying core performance by excluding noncash adjustments and one-off items, which I will further elaborate upon.

First is a net fair value gain of $48 million, mainly from our investment in a private equity fund managed by 7RIDGE, which holds the company Trading Technologies. The fund entered into a binding agreement to sell TT on 24th July '25. 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 the noncash nature, these are removed here for the purpose of adjusted earnings. Third, we recognized a one-off gain of $8 million on the sale of our financial investment in the Philippines Dealing 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, U.S. dollar bond revaluation as the U.S. dollar depreciated and secondly, lower lease liabilities. Our leverage ratio remains at a low level of 0.8x and interest coverage ratio decreased from -- decreased to 54x from 77x 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% to 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, FY '26 expenses are expected to rise by 4% to 6%, consistent with our guidance for 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 modernizing our technology infrastructure for scalability, resilience and innovation. As previously guided, CapEx investment will be kept at 7% of operating revenue over a cycle.

In FY '26, we expect to invest $90 million to $95 million in CapEx spending. In M&A, we continue to explore value-accretive bolt-on acquisitions that complement SGX' 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 3 years.

The Board has proposed raising the final quarter's dividend by $0.015 to $0.105 per share, subject to shareholder approval at the AGM. This marks a 16.7% annualized increase, reflecting the strong earnings growth this year. Total dividends for FY '25 will be $0.375 per share, up 8.7% from FY '24. We are also pleased to announce a steady dividend increase of $0.0025 every quarter from FY '26 to FY '28, subject to earnings growth. The chart on the right illustrates how we will continue rewarding shareholders who will enjoy the $0.07 increase and then $0.04 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 Boon Chye, 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 with broad-based 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 derivatives daily average volume or DDAB grew 17% year-on-year to 1.3 million contracts. Volumes traded during our overnight T+1 session grew at an even faster pace of 36%, reflecting the increasing usage of our products by global participants.

Over the past 2 years, our T+1 volumes have grown at a CAGR of 23%, underscoring our role as a around-the-clock liquidity hub for global investors. The continued growth in our T+1 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+1 sessions for equity derivatives. As a result, our clients now benefit from 15 more minutes of continuous trading in T+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 1 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 team 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 U.S. 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 OTC FX rose 28% to USD 143 billion, the fastest year-on-year growth amongst peer exchanges.

SGX FX is now amongst the top 3 exchange-backed OTC FX 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 and 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 Real Futures provide investors with efficient exposure to commodity-linked 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 point. We've 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 4 years, outpacing our regional peers. Through our efforts to deepen market participation and the tailwinds from the MAS equity review group to boost buoyancy, we've 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 added more names to our Singapore deposit receipt suite, enabling investors to implement varied strategies and achieve portfolio diversifications across more regions. We have 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-asset 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 FY 2026 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 stabilize following the earlier economic uncertainty and volatility, capital flows into Asia are likely to remain strong, and we are well positioned to capitalize 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'll build on the upward trajectory of our OTC FX and derivatives business, while on track to achieve low to mid-teens percentage growth in the OTC FX 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 shelf by advancing our China and India corridors, broadening access across ASEAN 2 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 teams. With a focused sales strategy and targeted client acquisition efforts extending beyond Asia, we're 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 $0.0025 every quarter from FY 2026 to FY 2028, subject to earnings. This reflects our commitment in delivering sustained earnings through advancing our multi-asset strategy.

In closing, FY 2025 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 focus 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 through our guests in person here and those online. Thank you.

And 2 questions for me. The first is just on your dividend. And I think investors will appreciate the clarity on the trajectory there. And you talked about it being subject to earnings. So I just wonder if you could give us a little bit more clarity on that. Is there an upper range of what you would accept in terms of dividend payout ratio? Do you think about it in terms of earnings? Or do you think about it in terms of cash flow per share? So just trying to get a sense of what would need to happen to earnings to not hit that trajectory?

And then my second question is just on sort of the broader strategy thing. A lot of interesting themes you sort of brought up there. But we're seeing this dedollarization trade. We're seeing diversification. I just wonder if you could talk a little bit about what opportunities you see for the group from that over the next 2 or 3 years.

Yes. So thank you, Nick. On your first question, first, our balance sheet is strong. We want to take a very disciplined approach to capital allocation. The medium-term guidance of 6% to 8% revenue growth as I unpack that in terms of accelerating the growth in our OTC FX business alongside our derivatives business. At the same time, you mentioned the equity markets review group. We've clearly seen positive momentum into the stock market. In particular, institutional and retail flows into the mid-cap stocks, our index stocks, our REITs has always traded very well. What has obviously changed is the mid-cap stocks.

And on top of that, you also mentioned in there, clearly, there is shifting investment capital flows. We're seeing that. Our business model, multi-asset strategy is a beneficiary of that. More of our customers are adding more asset classes to their portfolio. And we look at this alongside of our clear growth agenda. Volumes in July has continued along similar trajectory. We will release our July stats next Monday. So the strong balance sheet, disciplined allocation and our clear growth agenda give us confidence of giving the FY '26 to '28 dividend guidance.

Your second question was around the equity market review group and what flows we see or the dedollar -- yes.

Yes. So maybe Boon Chye can add to the dividend story. Can you hear me? Yes. So look, thanks for the question, Nick. We do look at total shareholder return. So focus not so much on yield and payout ratio, right? I'm -- we are a listed company, right? We do need to put that caveat in there because we do need to go to our Board. We are confident in our ability to deliver the step-up in dividends, but in this day and age, who knows what will happen, right? I mean, we hit another COVID situation and all that. We always need to have the caveat in there, but we're confident in our ability to deliver the dividend growth.

Your second question on opportunities in the shift in global macro, many for the group. First, the diversification team clearly that suits -- reinforces our multi-asset strategy. We have seen flows moving between different asset classes, adding more asset classes for diversification. Clearly seen an increase in our T+1 session, and then the round-the-clock liquidity and then alongside with our very liquid FX futures and OTC FX business, it just allows investors to think about other currencies to put their investments into. So we're optimistic that in this shifting environment, there would be opportunities that we can capture. And part of the strength of the SGX Group is our responsiveness to trends and importantly, clients demand requirements and looking alongside with our clients.

So this is not going to be new to us in some sense because we spend a lot of time trying to think around the corner. And the example I would use is the CNH contract. At the time of design, we made the observations that one day, somebody needs to be the largest RMB CCP in the world. Nobody had done RMB clearing and somebody has to acknowledge that RMB is not admissible on CLS. You can't net with dollars. So that was the design criteria for our contract 10 years ago. And that's why today, it's the #1 contract. So we think very, very hard about tooling and instrumentation needs, and we think very, very hard about price discovery and then risk transfer.

So an example that we just saw overnight is the price of the kilo bar of gold. There's a locational price -- and we've always thought very, very acutely about what is the locational price and what is the role of Singapore Exchange in offering an incremental piece of price discovery and risk transfer. And that will hold true across our software stack as well as our product design and our clearinghouse design.

Maybe I'll just provide a data point. I think it is in relation to our cash market. So if you look at our ETF suites, we have about 12 ETFs that hold Singapore underlying assets. This could be STI stocks. It could be the government corporate bonds and then SREITs. They're about 40% of our AUM. And if I look at it, of the net inflows year-to-date, close to about -- just above $700 million, which is substantial. And it's quite even in the sense that about $300 million went to the STI, the 2 STI ETFs, another $350 million to our fixed income, the Sing dollar fixed income. So I think that reflects somewhat the investor appetite. And I think market observations is that Sing dollar is a safe haven currency, a place where you can -- where it's predictable and where you can get attractive risk-adjusted returns. I think that's been reflected what I've seen in the stock market in the last 7 months or so.

Thilan from Maybank. I've got 2 questions. The first one is you said you're optimistic about your IPO pipeline. Maybe if you can give us a little bit more color on what you're seeing in terms of what the pipeline is looking like sectors and some sort of timing and things like that. So that's my first question. The second question is, when I look at your equity derivatives revenue business, that's actually come off in terms of momentum in the second half versus the first half. It's grown about 6%, in the second half. It was about 20% in the first half. Is that more to do with overall markets coming back to mean? Or are you seeing some pressure in terms of your market share in some of the derivatives? Because I noticed the 225 is down quite a bit. The SiMSCI is down quite a bit as well. So I just want to get some color there.

So yes, on the first one, and Boon Chye mentioned this, we're certainly much more positive about the outlook for the IPO pipeline. I know we've said that before in recent years, but some important things have changed. First, it's good to say this now on the back of a number of good deals that we saw in the past month. So with the NTT Data Center REIT IPO that was the largest IPO in a decade for us. It's also diversifying that REIT offering of us into the digital infrastructure space. Infotech Systems IPO on main board of a technology business, SaaS business.

We had Lum Chang Creations on the Catalist Board, which has performed incredibly well post listing, so good momentum behind it. And with China Medical System last month, we have a secondary listing of a sizable biotech life sciences business. All of this is, of course, coming on the back of a number of these factors that Boon Chye already mentioned, the market is up, trading is up, not just in the STI index, but also in the smaller and mid-cap segment below it.

I would also say that Asia, Singapore is benefiting from some diversification in global investment portfolios, and that's resulting into inflows that we're seeing in the region here. And of course, also the effects of the equity markets review group measures that are coming through, the EQDP deployment around the corner. All of these things are, of course, important. I would say there is definitely also more of a risk-on approach amongst investors that we're seeing, more confidence around the rates outlook, more confidence around growth. So that sets up well for what we are seeing in our pipeline, and that comes to the confidence. Maybe to be a little bit more specific around that.

We define the pipeline as companies that we know are working on a listing in Singapore. So they've hired advisers, have started the preparatory work. There are more than 30 companies in our pipeline, and that's sort of the visibility that we have. Of course, there is many more companies beyond that, that are still contemplating and sort of looking at the environment. I would say these companies are nicely split equally between main board companies and Catalist companies. So there's a spectrum of sizes.

And in terms of sectors, I would say, also nicely diverse. And I think we'll see more of what we saw in the last month where we see different types of businesses come to market. So with that, more confidence, a good number of those companies are already in discussions with RegCo, including those that have already put in their docks.

On your second question, half on half. Total EQD volume has tapered off a little. There's nothing that we've seen that makes us feel that this wholesale structural change in strategic asset allocation has tailed off. In fact, new themes, which are hard to address are being addressed to us all the time. So last year, it was emerging markets, minus China. This year, it's world minus U.S. Europe, minus U.K. There's an infinite number of variations. And in fact, the thing that we're missing because our proposition always has been total waterfront, total portfolio, equity and currency risk premium.

We're already having to think about the next 20, 30, 40 equity risk premium products that help fill in the shelf and how to deliver that to the customer. So the specific ones that you cited, 225 and SiMSCI, the realized vol has come off, but then there's a lot more demand for H50, A50 and India.

Shifting amongst countries within equity derivatives, but also shifting amongst asset classes. Half on half, a slight dip. As Michael explained, we saw that into commodities. So I think our multi-asset allows us to ride through the shifting investment flows that managers have.

Maybe I could add to that, right? In terms of market share, in terms of flagship products, the China 50 and Nifty, we're there. We're quite comfortable with our market share, right? The metabolic rate is still high. It will vary according to episodic issues. But actually, a key component is the number of trading days in the second half. It was dramatically lower than the first half.

We should take 2 questions from those dialing in.

So maybe I will combine the questions on dividends. One is from Jayden of Macquarie. Why not do more now and the FY '25 payout ratio is 62% relative to earnings and planned step-up is to $0.525 to -- in FY '28. So why not do now? The next question related to dividends from Gurpreet of Goldman Sachs. Thanks for the presentation. Good to see the raised dividend per share guidance. How does management now think about balancing shareholder returns and bolt-on acquisitions? It seems relative to the consensus earnings. 75% to 80% will be paid out as dividends. Are you not actively looking at targets to add on capabilities?

Let me try and take both in a combined way, and then feel free to add in. Why not now? We look at this on a sustainable long-term growth. And our aim is to really deliver growth to our stakeholders, our shareholders over medium to long term. And we want to balance that, not just investing in our core businesses. We balance that also with returning capital in the form of a guidance over the next few years. But also, we're looking to grow where there may be opportunities that we could do bolt-on acquisition. The next question may come, how are you going to fund that and how you look at your trajectory in the dividend. Our strong balance sheet and cash flow allows us to look at value-accretive opportunities if we can bolt on to what we have.

And I think FY '25 has clearly demonstrated that the multi-asset strategy that we have talked about for years is now coming true in an environment like that. And it's not just FY '25. We've seen short parts of that in '23 and '24. And we don't look at this on a payout ratio. And I think moving from our mid-single-digit guidance that we did a year ago, we hope this gives our shareholders better clarity on the forward trajectory.

Yes. So just to add to that, right? Our investors are looking at us as a dividend kind of growth stock, right? Many of our investors are telling us we are invested in you for growth, right? So we always have to balance that out with regards to enhancing shareholder return, but also investing in sustainable growth, right? And what does that mean? So as Boon Chye mentioned, organic growth and strategic growth opportunities, bolt-ons and all that. The thing I would say is the strong results this year has given us a platform and given us optionality with regards to how we can be funding any potential bolt-on opportunities.

Maybe to those of you here. Harsh and then after that. We'll come to you next. Yes, Harsh.

Harsh Modi from JPMorgan. Thanks for the dividend pickup, that's long-standing demand. On -- I just wanted to understand your thought process slightly better. Should we just factor in this as absolute guidance? Or is this the minimum you would pay? Or is this the maximum you would pay? That's slightly unclear when you say subject to earnings.

I'm sure you like surprises on the upside.

Absolutely.

So that will be our response to you. Whether that's a guidance or minimum. I'm sure you like surprises on the upside, and that's what we'd like to aim for.

No, that's good to know because if I think about payout ratio to some of the earlier questions, it's around mid-70s. And if I look at last 15 years, you have gone from 60% to 100% payout. So it seems there's an upside risk to it. So is it more dependent on M&A that if you can't find a good place to allocate capital, then potentially you can increase your payout from your current guidance part? Is that how we should think about it?

I think we can use the capital, if we were to look at inorganic growth we bolt-on, that's going to do one balancing about returning -- paying shareholders more. But even if we don't find those opportunities, there is still tremendous opportunities in our core business, and we'll invest in that. But obviously, the scale of those investments will probably be different versus organic and inorganic. And there, we're going to look at the timing. And with that, we always look at this in the medium term. If we don't need as much of those for organic, which we'll still continue to invest, we will return more.

Just to add, right, again, our investors are telling us, right? They look at total shareholder return. From a 1-year perspective, as judge against the June 30 share price, 1-year TSR is at 64%, 63%. 63%, 3 years, 74%, 5 years, 100%, right? So that's something we -- our investors are looking at. Not so much just the dividend for the particular quarter.

Fair point. And the stock has been absolutely one of the best performers. Second question on the treasury income impact with much lower rates. Any quantification of how much would the low SORA and potentially dollar rate cuts impact your treasury income?

I wasn't trading before. So I'm not sure, given the gap in number of years, I'll let my CFO answer that.

Look, treasury income, again, as an ex trader, right? It's a function of 2 things, right? The collateral balances that we have in the interest rate environment. On the collateral balances that we have, in so far, as we're still seeing heightened activity, the margin look -- the interest rate environment, who knows, right? But we have factored that into our thinking. We have layered in accordingly. Yes, but it is a function of the market. So I can't give any more guidance than we are factoring in what the market is pricing it.

No, that's fair. And exactly that's the thing that you have very solid volume growth, multiple sources of collateral, but rate decline has been quite brutal, right, across currencies, especially SORA. So as you put in the forward curve, on top line, how much of departure from the 6% to 8% growth should we expect year-on-year. Again, all else constant, I know we are not going to hold you to that number, but some sense of treasury income because it's a pretty meaningful shift.

Yes. Sorry, just to clarify, our 6% to 8% is ex treasury income, right? So treasury income is always going to be separate from that.

So what you're saying is what could subtract from that if your treasury income comes off, it's going to be a function of the yield curve, which is why we're guiding a 3-year ex TI. But then you could have the shape of the curve impacting positively or negatively in 1 year, it may reverse a little bit. So on the 3 years, we're looking at this a fairly averaging of how we think about potentially the curve.

And Harsh, we're one of the world's largest yen clearing houses. It's not true to say that interest rates are coming down.

And then the efforts through Pol and his team globally, more collateral to distribution because more usage of our platform.

I'm Jovi from The Edge Singapore. Just my first question here, just asking for more color on the potential acquisitions. What types of markets or platforms do you think will help round out SGX's offering. Would any of these potentially help boost new equity listings or equity trading here?

So our commodities and maritime suite has clearly performed very well. There's lots of synergies in the freight indices via Baltic, which is also a global index provider in the maritime space now, coupled with bulk commodities that is traded cleared by SGX. That's clearly a space that we've seen in the shifting investment flows and how investors are looking at asset allocation. So that's one area that I think there could be good sectorial growth. And if there are areas we can look at to invest, we will look at it.

On the equity market, we're clearly working closely with the ecosystem fund managers, whether they are going to be allocated part of the EQDP. What we're also seen is the inflow into the mid-cap stocks. And then not forgetting, obviously, the GEMS scheme right, working with product issuers, and we're going to look at introducing more products around that.

Just a second question here. With this strong set of results and the sense of confidence we're getting for potentially stronger years ahead, are we expecting higher staff costs in the form of higher bonus, higher pay for management?

It's actually great that our town hall is our internal staff. To answer your question, look, the variable staff cost is going to be a function of our performance. So it can grow with performance. It can come down, if performance isn't great. On fixed staff costs, we have shown that we've been able to be disciplined in our hiring. But more importantly, we're looking at workflow processes where our colleagues could take on more. So we want to manage the growth of the staffing by looking at exchange, how operating leverage will come through.

Maybe one last question from online. Is there an update on the crypto perpetual contract? What sort of timing are we looking at? And how will this contribute to our revenues? It's from Marcus of CLSA.

Okay. Thanks for the question, Marcus. I think we will probably want to wait another 6 months to give you a more thorough update. We've done a great deal of work. The timing is probably around year-end, subject to a number of things. The critical path is really about making sure that there is market readiness because while it comes across purely as a payload, which is crypto actually all the work is about the infrastructure required to deliver this new format. We're creating a new market category called the Perpetual Future, which doesn't really exist in the regulated future space.

So a lot of the work we're doing is with customers, with intermediaries, with the post trade. And of course, with the OTC market participants that we're trying to crowd into our space. So the time line is, as I indicated. And once it's launched and goes live, I think we'll give you a more sort of fulsome update. But timing seems perpetuous. I mean just on the news flow in the past week.

Okay. Any other last question here?

I wanted to ask a question about the equity market review group. So like could you share a bit about how SGX is working? Because as Paul mentioned, there's over 30 companies in the pipeline. So by the end of this year, how many companies can we see listed on the SGX new listings, I mean? And if you could also share more details about how you're working with the review group.

Yes. So maybe I have Yao Loong and Boon Gin do, yes.

Yes. So the suite of measures that have been announced so far have been targeted in a couple of areas, right? So one would be in driving the demand side. And of course, we know the flagship $5 billion EQDP. So that has been a series of actions that have been taken, including selection of managers. And I think there will be an important constituent of the stock market, and we'll be working with them on a series of things, including how they intend to deploy, how they may support some of the IPOs and in also working with possibly companies. And we have seen the results of some of the large companies, large cap companies that have done well in capital management. They have done well in certain shareholder initiatives that have created value.

So we think there is certain things that we can do in that area. And ultimately, if we can create more companies that have higher liquidity, a valuation that better reflects their intrinsic value. I think that's a win-win situation for both the investing side and also the issuers. There's also a bunch of measures around the regulations, which I think Boon Gin will touch on, trying to create that environment that's pro enterprise without compromising on the quality of investor protection.

And then the third bit is about the product shelf that we have. So it's not just about the cash equities. It's not just about IPOs, but the products in the ETFs, the SDRs. We know that Singapore investors are sophisticated and they trade globally. Nick's report, which was a good report shows that 7% of Singapore's household financial portfolios, only 7% is in listed shares. OECD is probably about 2030. I did read the report. And half of what Singapore's portfolios are. And clearly, it's in overseas stocks. How do we bring some of this back? This could be in the form of ETFs, in the form of SDRs, we call it depository receipts. So there's a whole range of things that we will do. And then lastly, we will also be looking at the quality of our market structure.

Just a hint, I think when we look at things like board lot sizes, some of our index stocks have done pretty well. It is -- there's a strong case to argue that we can make them more accessible to the wider public and to the -- especially to the robo portfolios and so on. So I think that will be something that we'll be taking action. And I think the EMRG will be looking at this and then announcing them as a package in due course. So I'm not going to preempt that.

Yes. I think it's important to look at the efforts of the review group holistically. So there's an enterprise part, which Yao Loong has covered. Then there is a regulatory part, which is meant to complement that, right? So the 2 parts are meant to complement each other. So if you look at what's happening in terms of the efforts of the enterprise group, they have created a lot more market discipline because we're going to see more institutional participation. We believe that this will raise standards across the board. And this will complement the efforts at the same time on the regulatory side to streamline the IPO process as well as move towards a disclosure-based regime, which is more in line with the international developed jurisdictions, right?

So all these efforts complement each other. Without as Yao Loong said, compromising on our regulatory efforts. Surveillance will continue to be robust, whether it's trading surveillance or whether it's corporate surveillance. And we continue to be very committed in employing our most effective and targeted tools and making sure that we're fair orderly and transparent market.

On your last question. I thought we already did a pretty good job to give you some sort of number and now you need to know when. So we can't say, right? So we're also subject to market circumstances, of course. I would say when we sort of think about the number of 30, it also links back to that the number of deals that we see happen in the market here before the downturn. So we have confidence that that's a sustainable number and something that we can grow on from there.

Having said that, I think 2025 calendar year is still a bit of a transition year, right? The first half was still pretty quiet and pretty slow. We see globally IPO markets reopening. Will we continue to see more activity into the second half? Yes. But think about that number as something for the, I would say, medium -- for the medium term and a sustainable number. So as deals happen, we hope to see others that are -- as I said, there's plenty of others that are still considering their options, and we are in contact with them, and they will then get added to the pipeline as we get along.

Okay. Thank you all. Appreciate your presence and attendance. Thank you.