By P.R. VENKAT
SINGAPORE -- The Singapore Exchange Ltd. said its fiscal third-quarter net profit fell 45.5% as the economic downturn reduced trading volumes and led to fewer companies listing on the exchange.
SGX's net profit was 55.3 million Singapore dollars (US$36.9 million) in the three months ending March 31, down from S$101.5 million a year earlier. Revenue fell 31% to S$119.8 million, compared with S$173.3 million in the same period last year.
"The quarter has been challenging with all revenue categories affected. Nonetheless, there are opportunities that SGX can take advantage of in derivatives, commodities and OTC [over the counter] clearing," SGX Chief Executive Hsieh Fu Hua said.
The global economic slowdown and the credit crisis has forced many companies to either defer or drop fund-raising plans through initial public offerings, which has hurt listing revenue for exchanges like the SGX.
Thin trading volumes in the securities and the derivatives markets have reduced clearing fees.
During the third quarter, SGX clearing fees from the securities market fell 48.3% to S$33 million as trading value declined 52% over the year to S$55.8 million.
SGX said only two companies tapped the IPO market in the third quarter, raising S$12.8 million. Nine companies raised S$673.5 million in the same period last year.
"While IPO activity was weak, secondary fund raising through rights issue was active," SGX said. In the quarter, a total of S$6.46 billion was raised by rights issues, compared with S$380 million in the same quarter last year.
In the derivatives market, SGX futures-clearing revenue declined by 14% from the prior year to S$29.5 million in the third quarter.
Revenue from clearing structured warrants fell 63.7% to S$1.7 million.
For the first nine months of its fiscal year, SGX's net profit fell 39.4% from a year earlier to S$214.5 million. Revenue fell 28.8% to S$424.8 million.
Write to P.R. Venkat at venkat.pr@dowjones.com
