SGX gains BUY rating as Maybank lifts target price to $16.09

SGX’s average daily trading value (ADV) in 2025 year-to-date is up 20% compared to 2024.

Maybank maintains a BUY rating on Singapore Exchange Ltd (SGX), raising the 12-month target price to $16.09, up from $14.16, representing a 16% upside from the current price of $13.85.

According to Maybank, SGX’s average daily trading value (ADV) in 2025 year-to-date is up 20% compared to 2024. This performance is driven by structural tailwinds, including a surge in corporate restructuring activity, a 76% YoY increase in share buybacks, and a domestic construction boom that is buoying sentiment and equity flows.

Falling domestic interest rates are further boosting the investment case for equities. Maybank highlighted that 6-month Singapore T-bill yields have dropped to 2.0%, which is making equity markets relatively more attractive for capital allocation.

The Monetary Authority of Singapore’s $5b Equity Market Development Program (EQDP) is another key catalyst. Maybank noted the initiative is aimed at deepening market liquidity—particularly for small and mid-cap (SMID) stocks.

In response, the firm has raised its market velocity forecast for SGX from 37–40% to 41–42% for the FY25–FY27 period.

SGX’s derivatives business is also benefiting from heightened global uncertainty. Following the announcement of new tariffs by former U.S. President Trump—referred to as “Liberation Day”—SGX saw a 13% increase in derivatives trading volumes.

Maybank sees this as a sign of SGX’s strength as a regional hub for risk management amid growing FX and trade volatility.

Maybank applied a blended valuation approach to arrive at the $16.09 target price. This consists of a 70% weighting on discounted cash flow (DCF), using a 6.6% WACC and a 1% terminal growth rate, resulting in a valuation of $15.62.

The remaining 30% comes from a peer-based valuation using a 27x P/E multiple, yielding $17.18. Importantly, SGX’s projected FY26 P/E of 20.7x is still below its historical average of 23.5x, suggesting further upside potential.

On the upside, Maybank identified several catalysts: continued geopolitical and market volatility, regulatory reforms that support listings and liquidity, and potential mergers or acquisitions that align with SGX’s growth strategy.

On the downside, risks include possible disruptions to SGX’s trading infrastructure, intensifying competition from regional exchanges offering similar derivative products, and the growing influence of fintech alternatives and off-exchange trading platforms.