FY09 profit S$306m inline. FY09 net profit S$306m (-31%yoy) was inline wth Citi FY09E (S$304m) estimates (Consensus S$298m). 4Q09 net profit S$91m, +65%qoq (3Q: S$55m), was driven by a near doubling of equities turnover, and with the STI recovery since Mar-09 SGX looks to have passed the earnings trough for this cycle. Maintain Buy, TP S$9.50. Our target price is based on S$2.1bn/day for FY10, based on our strategist's STI target of 2700.

Equities. For equities, 4Q09 average daily turnover of S$1.7bn, +91%qoq, while 4Q share volumes yoy to 1.68bn shares per day (3Q: 0.9bn). Uncapped trades (4bps of contract value) accounted for 64% of total contracts (3Q: 62%), with an average (2-way) clearing fee of 6.1bps per S$ traded.

Derivatives. Clearing revenue +15%qoq to S$35.8m on higher futures contracts (4Q: 13.9m, 18%qoq), and a recovery in structured warrants turnover (4Q: S$3.7bn, +37%qoq). Key drivers of growth in futures contracts came from Nikkei (+15%yoy) and Nifty index (+34%yoy).
FY2009 DPS S$0.26 (S$0.14 base + S$0.12 variable), base DPS raised to S$0.15 for FY10: 4Q09 DPS of 15.5 cents declared, bringing total DPS for FY09 to 26 cents (90% payout). Mgmt also added that the base dividend will be increased from 14 to 15 cents from FY10.

New CEO from Dec 1: SGX recently announced that Mr. Magnus Bocker will assume the CEO position from current CEO Hsieh Fu Hua on Dec 1, for an initial term of 3 years. Mr. Bocker, 47, is leaving his position as President of Nasdaq OMX to assume the SGX CEO role and has over 20 years of leadership experience in the Exchange Industry.