Will EQDP flows and lower rates lift SGX volumes?

Analysts raised SGX’s target price to $17.90 from $17.40

Singapore Exchange (SGX) is expected to benefit from continued Equity Market Development Programme (EQDP) fund deployments and a softer Singapore overnight rate average, according to RHB.

Anticipated US Federal Reserve rate cuts in 2026 could further boost demand for REITs and other yield assets, supporting cash-equity activity.

SGX reported strong performance in the first five months of FY26, with securities daily average value (SDAV) rising 19% year-on-year (YoY) and derivatives daily average volume (DDAV) up 6% YoY.

In a report from Brand Finance, SGX was named Southeast Asia’s most valuable exchange brand in 2025, with a brand value of $798 m (US$591 m), ranking seventh globally and third in brand strength with a AAA rating and a Brand Strength Index score of 87.7/100.

The exchange also posted record financial results, with estimated revenue of $1.3 b and net profit of $610 m for FY2025, whilst earnings per share rose from 47.1 cents to 49.2 cents.

Growth was driven by derivatives, FX, and commodities, with its FX platform now among the top three exchange-backed OTC FX venues globally, and strong demand supporting its iron ore contracts segment.

November trading activity added a modest 2.5% to 1HFY26F SDAV forecasts, whilst derivatives volumes remained largely in line with expectations.

The report noted that medium- to long-term growth is underpinned by regulatory initiatives and favorable macroeconomic conditions, though valuations remain relatively rich.

November securities turnover increased 18% YoY to 435.5b, with SDAV climbing 24% YoY to $1.78b, driven by interest in index stocks and REITs, particularly among retail investors.

The Straits Times Index (STI) rose 2.2% month-on-month, lifting calendar YTD gains to 19% and total returns to 25%, outperforming most ASEAN markets. SGX also recorded two Mainboard listings, namely Yangzijiang Maritime Development and Coliwoo.

Derivatives activity saw 25.9 million contracts traded in November (-1% YoY), whilst DDAV rose 3% YoY to 1.31 million contracts. Commodity derivatives volume increased 6% YoY to 5.3 million contracts.

Bitcoin and Ethereum perpetual futures, launched for institutional trading on 24 November, recorded credible volumes in their first week, though DDAV fell 14% MoM amid regional market consolidation.

RHB raised SGX’s target price to $17.90 from $17.40, a 6% upside with a projected FY26F yield of around 3%.

The valuation is based on a 12-month forward-rolling EPS and a target P/E ratio of 25x, incorporating a 4% ESG premium due to SGX’s above-average ESG score compared with the national median. Despite higher forward dividend forecasts, yields remain modest.