SGX must brace itself for a sluggish final quarter: analyst

Its stellar 25.6% profit growth will slow.

According to OCBC, Singapore Exchange (SGX) posted 3QFY13 net earnings of S$97.7m, up 25.6% YoY, and above consensus estimate of S$94.7m (based on Bloomberg poll).

Buoyed by the strong pick up in trading activities in the first three months of 2013, this helped to lift its Securities business. The Securities Daily Average Traded Value (SDAV) was up a strong 17% YoY and 41% QoQ to S$1.7 billion.

Here's more from OCBC:

In addition, the Derivatives Daily Average Traded Volume (DDAV) also posted a record 479,235 contracts, up 52% YoY and 34% QoQ. Besides the stellar performances from both its core businesses, SGX also benefited from higher issuer services.

Total equity funds raised jumped from S$484m a year ago to S$2.4b this quarter. A 3Q dividend of 4 cents has been declared and is payable on 2 May 2013.

After the stellar performance in 3Q, the final quarter is likely to see some slowdown, largely due to prevailing macro economic uncertainties as seen from the recent weaker-than-expected growth of the Chinese economy.

We expect volatility to come back again as sentiment is likely to turn more cautious, especially after the good gains for key equity indices since the start of the year. As such, we are projecting a QoQ decline in 4Q.

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