‘SGX needs to be better understood,’ says CEO Loh Boon Chye

[SINGAPORE] Steering the local bourse through a once-in-a-generation equities-market revival ought to be a thoroughly enjoyable victory lap.

Yet, for Singapore Exchange (SGX) chief executive Loh Boon Chye, the triumph is clouded by familiar gripes.

Securities’ daily average value recently surged to S$1.8 billion, hitting an 18-year high, but market watchers continue to bemoan the lack of a marquee initial public offering, and retail investors remained bruised by the poor first-day share price performance of several recent debuts.

​It has not been an easy ride managing expectations for a long-suffering domestic cash market. During a recent interview, Loh offered a rare, mild complaint about the company he has run for more than a decade.

​”SGX needs to be better understood,” he said.

​It was the polite understatement of a man who operates a highly profitable global financial machine, yet is constantly asked why his domestic front porch looks a little quiet.

Indeed, the public routinely judges SGX almost entirely on its domestic stock market. But the financial reality tells a different story.

Net revenue for the full-year ended June hit S$1.48 billion – nearly doubling from a decade ago – as SGX transformed itself into a global risk-management tollbooth, clearing Chinese equity futures, Indian index derivatives and bulk commodities for the world’s largest investment banks.

On an adjusted basis, which excludes certain non-cash and non-recurring items that have less bearing on the group’s operating performance, net profit climbed 24.6 per cent year on year to S$759.5 million.

Yet, the misunderstanding of SGX persists.

This stems from an optical illusion: While the cash equities market is the most visible part of the bourse, the actual engine room is increasingly offshore and diversified across asset classes.

Structural shift

​​Whenever the exchange reports its numbers, the conversation inevitably drifts towards the same question: When will Singapore get its own SpaceX or SK Hynix?

​Loh handled the question with practised calm, refusing to chase artificial IPO targets just to appease the gallery.

While 21 new equity listings came to the market in FY2026, raising S$4.1 billion, he noted that volume and variety matter just as much as a single blockbuster.

“Size is important, but the number of companies, the number of IPOs, are also important because they give choices – different sectors, different sizes, different requirements for some investors,” he explained.

​He is equally unsentimental about the retail obsession with first-day share-price pops, arguing that a stock plunging on its debut does not reflect the underlying quality of a company.

“A first-day IPO price performance does not indicate the quality of the business,” he said.

“Sustained liquidity post-IPO, companies growing their businesses, creating value for shareholders – I think that is the holistic way to look at the listed company performance.”

​SGX is playing a long game.

The management believes the recent jump in cash turnover is a permanent fixture, rather than a passing phase, underpinned by the S$5 billion Equities Market Development Programme and the SGX Value Unlock Programme to slowly fix structural valuations.

“It is a structural shift,” Loh said, noting that the market revival is not due to any single factor.

“It is the whole ecosystem coming together and looking at ways, measures, initiatives to have a more active, vibrant stock market.”

The way he sees it, the stock market acts as a crucial magnet. A vibrant cash market pulls the broader financial ecosystem together, encouraging institutional players to set up shop. Those same players eventually move on to trade derivatives and hedge currencies.

“Cash and derivatives are really both sides of the same coin,” he added.

​Pragmatic pipes and capital discipline

​​But building a global tollbooth requires strict capital discipline.

You must know what to keep and what to throw away. And SGX’s recent divestment of boutique quantitative-index provider Scientific Beta – at the cost of a S$53 million impairment charge – illustrated this pragmatism.

​By clearing out slower-moving assets, SGX freed up capital to fund its core infrastructure.

It has earmarked S$100 million in capital expenditure for FY2027, part of a two-year platform transformation programme to upgrade next-generation trading systems and data centres.

​The same unsentimental logic applies to regional expansion. For decades, policymakers and market commentators have floated the grand vision of a unified Asean exchange.

But Loh dismissed that pipe dream, choosing instead to build pragmatic bilateral pipes such as Singapore Depository Receipts and the newly operational Singapore-Nasdaq Global Listing Board.

​This forms part of a much wider ambition. “If we can grow beyond Asia, then I think we will be a relevant node in the global world,” he said.

Backing the global, multi-asset strategy

​Loh’s thesis that SGX is outgrowing its domestic borders is corroborated by institutional watchers. The street recognises that the exchange’s real future is clearing currencies, physical gold and offshore derivatives.

​Maybank analyst Thilan Wickramasinghe noted that the bourse is deepening as a regional risk-management venue, while macro risks escalate and capital rotates to Asia.

He highlighted that equity-market reforms, safe haven flows and domestic growth are intersecting to open a structural pathway for broader equity-market liquidity and capital-raising demand, uniquely positioning SGX to deliver strong growth visibility.

​Other analysts are also intrigued by the pivot into alternative digital and physical assets.

For example, SGX has launched crypto perpetual futures to capture modern trading workflows, ahead of regulators in the West.

RHB analyst Shekhar Jaiswal indicated that gold stands out as an ambitious offering, with potential for a full Singapore ecosystem spanning physical clearing, vaulting, warrants and futures.

Macquarie’s Jayden Vantarakis echoed this, adding that the management is notably upbeat on interest-rate futures as well as gold futures, over-the-counter and physical products.

SGX’s core listings business is also showing signs of life. The IPO pipeline currently holds about 50 companies at various stages of engagement, up from about 30 the year before.

And for yield-hungry investors, there is a compelling caveat attached to SGX’s capital accumulation: Further capital could be returned to shareholders, if no suitable value-accretive mergers and acquisitions materialise.

For FY2026, the board proposed a one-off additional dividend of S$0.125 a share following capital recycling gains during the year, on top of a final quarterly dividend of S$0.115 a share.

This brings the total dividend for FY2026 to S$0.57 a share, up 52 per cent from the previous year.

Perhaps Loh is right: SGX does need to be better understood.

As capital allocation to Asia continues to grow, global investors need efficient ways to manage their risks in different asset classes.

The local market still treats the exchange like a struggling domestic stock market, waiting for a tech giant to save the day. But the reality is that SGX has already saved itself.