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Singapore Exchange Ltd (SGX): Driving Capital Market Growth with Record Profits, Robust IPO Pipeline, and Dividend Upside

Investment Summary: SGX Powers Ahead as Asia’s Premier Multi-Asset Exchange

Singapore Exchange Ltd (SGX) stands at the forefront of Singapore’s financial sector, operating the nation’s key securities and derivatives exchanges, alongside crucial clearinghouses. SGX’s expanding multi-asset strategy, innovative product launches, and resilient dividend growth have cemented its reputation as a defensive, income-generating investment—especially appealing amid ongoing global market volatility.

Key Investment Highlights

• Highest-ever full-year revenue and net profit since listing, reflecting the success of SGX’s diversified growth strategy.
• Progressive, reliable dividend policy, with a steady quarterly increase planned from FY26 to FY28.
• Strong IPO pipeline and new product innovation, including Singapore Depository Receipts (SDRs) and active ETFs.
• Singapore’s S\$5 billion Equity Market Development Programme set to reinvigorate the equity ecosystem and attract quality listings.
• Valuation gaps with regional peers expected to narrow as reforms and liquidity measures take hold.

Financial Performance: Record Results and Dividend Momentum

• SGX reported its highest-ever full-year revenue and net profit, with revenue reaching S\$1.3 billion, an 11.7% YoY increase.
• Adjusted net profit soared 15.9% to S\$609.5 million, fuelled by higher trading volumes across equities, currencies, and commodities.
• Despite a 2.6% dip in 2H25 net profit, full-year profit climbed 8.4% to nearly S\$648 million.
• The board declared a final quarterly dividend of S\$0.105 per share, raising FY25’s total payout to S\$0.375 per share—an annualised increase of 8.7%.
• The company commits to increasing dividends by 0.25 Scents each quarter from FY26 to FY28, reinforcing a progressive, shareholder-friendly policy.

Strong IPO Pipeline and Innovative Product Suite

SGX is strategically positioned to capture new growth opportunities, thanks to a robust IPO pipeline—the strongest in years. Over 30 companies are actively preparing for listing, supported by government incentives and enhanced market liquidity. This surge reflects growing confidence in Singapore’s capital markets.
Additionally, SGX continues to expand its product portfolio with innovative offerings such as:

• Singapore Depository Receipts (SDRs), enabling exposure to ASEAN markets
• Active ETF listings, broadening investor access and portfolio diversification

These initiatives, complemented by ongoing technology upgrades and product innovations, reinforce SGX’s role as Asia’s leading multi-asset exchange and a critical hub for global capital flows.

Revitalizing the Equity Market: S\$5 Billion Equity Market Development Programme

Singapore’s Monetary Authority (MAS) has launched the S$5 billion Equity Market Development Programme—a transformative move to reinvigorate the local equities market. Key highlights include:

• An initial S\$1.1 billion allocation to leading asset managers: Avanda Investment Management, Fullerton Fund Management, and JP Morgan Asset Management.
• Targeted support for underrepresented small and mid-cap companies, aiming to boost valuations, trading activity, and attract a new generation of high-quality listings.
• Enhanced liquidity, improved research coverage, and greater investor engagement, all contributing to a more dynamic and resilient ecosystem.

These reforms are already bearing fruit, as evidenced by record highs in the Straits Times Index, increased trading turnover, and renewed IPO momentum. While further transparency is sought regarding fund deployment strategies, these structural changes are unlocking shareholder value, narrowing valuation gaps with regional peers, and elevating Singapore’s status as a premier financial hub.

Investment Outlook: A Defensive, Income-Generating Pick with Growth Tailwinds

SGX’s compelling combination of record earnings, progressive dividends, and market innovation make it a standout defensive investment. Key reasons to consider SGX:

• Reliable dividend growth with a clear progressive trajectory through FY28
• Exposure to a robust pipeline of IPOs and new product launches
• Supportive regulatory backdrop and major market development initiatives
• Continued enhancements to Singapore’s capital market infrastructure and global competitiveness

Valuation and Recommendation

Entry Price: S$15.8
Target Price: S$17.2
Stop Loss: S$15.1
SGX’s solid fundamentals, forward-thinking strategy, and support from ongoing market reforms position it as a top pick for investors seeking long-term, stable returns with upside from capital market development.