Singapore Exchange is scheduled to announce its 1Q11 results on Monday, October 18 before market opens. Daiwa Securities is forecasting a revenue increase of just 2.8% year-on-year, to $178.2 million, and a decline in net profit of 8.2% y-o-y to $86.4 million due to higher technology expense and depreciation. But further on, Daiwa is bullish. “We believe the pipeline of pending initial public offerings (IPOs) will boost trading activity. The total amount raised for 2010 is projected to exceed $8 billion,” it states in a report out today. Hence, it is raising its six-month target price to $10.60 from $8.94. This valuation takes into account a forecast average daily turnover of $2.3 billion for FY11 which includes the impact from the trading of ADRs (American Depository Receipts) in Singapore. Daiwa has an outperform rating for SGX. The counter last traded at $10.12, up 21.5% year-to-date.
STI Chart View
At the moment, the STI (3,204) is facing upward pressures. However, short-term indicators are beginning to fatigue and the 3,200 level may pose a psychological resistance. Any retreat would be temporary and find support at 3,120. An earlier break above 2,900 gave a measuring objective of 3,400 and this still stands. — Goola Warden
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