Net profit of $91.17 mln for Q4 ended Jun ’09 (up marginally from a year ago, and 65% from Q3 ended Mar ’09) is in line with our estimate made when the quarter ended.

The securities trading value recovered strongly in the June ’09 quarter to $106 bln after hitting a low of $55.8 bln the preceding quarter, albeit well below the record Sept’08 quarter’s (SGX’s Q1 of fiscal 07/08) $165.7 bln.

Full year profit of $305.67 mln compares with the preceding fiscal year’s $444.3 mln, excluding the $34 mln one-off distribution from a fund.

Variable dividend of 12 cents is however 1 cent higher than we expected. With the quarterly base rate of 3.5 cents, or total payout of 26 cents, yield at $8.59 is 3%. The payout ratio in FY 08/09 is 90.5%, consistent with management’s dividend policy (91% the year before).
The current fiscal year ending Jun 2010 has started promisingly, with value of stocks traded in July up 22% from a year ago to $36.2 bln, albeit only marginally higher than June’s $35.9 bln.

However, with its market cap ($9.184 bln or 30x historic PE) almost the same as NY Stock Exchange (US$7.24 bln / S$10.4 bln) and 50% higher than Nasdaq OMX’s, SGX shares are hardly a bargain, unless trading volume were to surge in the coming months on the back of the world’s fascination with Asia. But with the market sentiment turning cautious, at least for now, we believe SELL is appropriate.

(HKSE has the highest market cap among listed exchanges in the world at HK$153.86 bln / S$28.48 bln.)