07 December 2015 Asia Pacific/Singapore Equity Research Diversified Financial Services (Financials (Asia))

Singapore Exchange (SGXL.SI / SGX SP) Rating (from Outperform) NEUTRAL* Price (04 Dec 15, S$) 7.67 Target price (S$) (from 10.00) 8.00¹ Upside/downside (%) 4.3 Mkt cap (S$ mn) 8,219 (US$ 5,869) Enterprise value (S$ mn) 7,343 Number of shares (mn) 1,071.64 Free float (%) 100.0 52-week price range 8.78 - 7.03 ADTO - 6M (US$ mn) 15.8 *Stock ratings are relative to the coverage universe in each analyst's or each team's respective sector. ¹Target price is for 12 months.

Research Analyst Arjan van Veen 852 2101 7508 [email protected]

DOWNGRADE RATING

Downgrading to Neutral on continued weak volumes ■ We reduce our earnings by 9% given continued weak market activity, reducing our FY17E ADT to S$1. November 2015 volumes continue to be weak, with ADT of S$0.97 bn. Key trends in November 2015 were: (1) Equity markets (30% of revenues). November's average daily turnover (ADT) was down 13% YoY at S$0.97 bn, down 8% MoM. December so far is weaker still, tracking below S$1 bn. (2) Derivatives markets (35%). Derivatives volumes were up 13% YoY in November 2015, and up 20% MoM. The momentum picked up due to stronger China A50 volumes (+42% MoM), with decline in December. (3) Depository services (15%). These fees are more based on equity volumes than value, with volumes down 27% YoY in November 2015. (4) Listings (10%): There was no equity listing in the month, with bond listings still the main source of new fund raisings. ■ Investment case. The key investment case for SGX is the longer-term growth through both equities growth and success in its strategy to become an Asian regional gateway, with derivatives being the medium-term driver, in our view. Nearer term, its fortunes are more linked to current equity market volumes. ■ Catalysts. Market trading volumes, IPOs and subsequent capital raisings and the success of new product launches (i.e., forex products). ■ We reduce our target price to S$8.00 (from $10.00) and as such downgrade our rating to NEUTRAL (from Outperform). The current share price implies 21x FY17E earnings, but note strong yield support (~4%).

Share price performance Price (LHS)

Rebased Rel (RHS)

10 9 8 7 6 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15

120 110 100 90 80

The price relative chart measures performance against the FTSE STRAITS TIMES IDX which closed at 2907.54 on 07/12/15 On 07/12/15 the spot exchange rate was S$1.4/US$1

Performance over Absolute (%) Relative (%)

1M 0.7 4.1

3M 3.5 2.7

12M 4.1 16.6

Financial and valuation metrics Year Revenue (S$ mn) EBITDA (S$ mn) EBIT (S$ mn) Net profit (S$ mn) EPS (CS adj.) (S$) Change from previous EPS (%) Consensus EPS (S$) EPS growth (%) P/E (x) Dividend yield (%) EV/EBITDA (x) P/B (x) ROE (%) Net debt/equity (%)

6/15A 778.9 458.0 407.4 344.5 0.32 n.a. n.a. 6.5 24.3 3.7 16.2 8.4 36.3 net cash

6/16E 822.2 462.4 408.5 346.1 0.31 -9.3 0.34 -0.4 24.4 3.7 15.9 7.9 34.3 net cash

6/17E 906.7 527.5 469.4 401.4 0.36 -9.3 0.37 14.9 21.3 4.3 13.8 7.1 36.4 net cash

6/18E 1,019.3 621.1 558.7 477.6 0.43 -9.4 0.41 17.9 18.0 5.0 11.7 6.2 38.4 net cash

Source: Company data, Thomson Reuters, Credit Suisse estimates

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do

business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS

BEYOND INFORMATION® Client-Driven Solutions, Insights, and Access

07 December 2015

Focus charts and tables Figure 1: SGX monthly and quarterly key market trends 2Q16E

1Q16

QoQ %

2Q15

YoY %

Nov-15

Oct-15

MoM %

Nov-14

YoY %

Securities market (30% revenues) Straits Times index 2,879 Equities turnover (S$bn) 45.3 Velocity (% ) 28 Avg daily t/o (S$bn) 1.0 % trades >1.5mn

2,791 53.4 33 1.2 0%

3.2% -15.1% -15.0% -17.6%

3,365 50.4 26 1.0 0%

-14.4% -10.0% 5.2% -3.1%

Securities market (30% revenues) Straits Times index 2,856 Turnover (S$bn) 19.4 Velocity (% ) 26 Avg daily t/o (S$bn) 0.97 % trades >1.5mn

2,998 23.1 30 1.05

-4.7% -16.0% -13.3% -7.5%

3,351 22.3 27 1.12 0%

-14.8% -13.1% -3.9% -13.1% 0%

Derivatives market (35% revenues) Structured warrants (S$bn) 0.7 Derivative volumes 37.4 - Futures volumes 35.6 - Option volumes 1.7

1.0 52.5 50.8 1.6

-32.2% -28.8% -29.9% 7.6%

1.0 40.0 37.8 1.9

-28.5% -6.4% -5.9% -13.9%

Derivatives market (35% revenues) Structured warrants (S$bn) 218 246 Derivative volumes 13,595,698 11,344,276 - Futures volumes 12,962,685 10,778,661 - Option volumes 587,611 526,740

-11.4% 19.8% 20.3% 11.6%

336 12,027,412 11,189,881 755,168

-35.1% 13.0% 15.8% -22.2%

Depositary services (15% revenues) Equity volume (mn) 25,919 Clients 82,141

28,866 82,701

-10.2% -0.7%

10,955 96,647

136.6% -15.0%

Depositary services (15% revenues) Equity volume (mn) 26,930 Clients 82,141

36,690 83,539

-26.6% -1.7%

32,467 90,764

-17.1% -9.5%

772 6 104

-0.1% -100.0% 94.7%

769 0 0

0.3%

770 2 42

0.1%

Listings (10% revenues) No listed companies New listings Funds raised (S$mn)

771 0 203

Listings (10% revenues) No listed companies New listings Funds raised (S$mn)

775 -0.5% 10 -100.0% 711 -71.5%

771 0 135

Figure 3: …with ADT at S$0.97 bn (CS 1Q16E: S$1.1 bn)

Securities market monthly turnover (SG$ bn) and growth (% p.a.)

Securities market average daily turnover (% p.a.)

80%

70.0

60%

60.0

40%

50.0

20%

4yr CAGR (%pa) 40.0

0%

3.5

3.0

Annual average

2.5

2.0 CS FY16E = S$1.1bn

1.5

30.0

-20%

20.0

-40%

10.0

-60%

0.5

0.0

-80%

-

1.0

Oct-15 Jul-15 Apr-15 Jan-15 Oct-14 Jul-14 Apr-14 Jan-14 Oct-13 Jul-13 Apr-13 Jan-13 Oct-12 Jul-12 Apr-12 Jan-12 Oct-11 Jul-11 Apr-11 Jan-11 Oct-10 Jul-10 Apr-10 Jan-10 Oct-09 Jul-09 Apr-09 Jan-09 Oct-08 Jul-08 Apr-08 Jan-08 Oct-07 Jul-07 Apr-07 Jan-07

Oct-15 Jul-15 Apr-15 Jan-15 Oct-14 Jul-14 Apr-14 Jan-14 Oct-13 Jul-13 Apr-13 Jan-13 Oct-12 Jul-12 Apr-12 Jan-12 Oct-11 Jul-11 Apr-11 Jan-11 Oct-10 Jul-10 Apr-10 Jan-10 Oct-09 Jul-09 Apr-09 Jan-09 Oct-08 Jul-08 Apr-08 Jan-08 Oct-07 Jul-07 Apr-07 Jan-07

Figure 4: Strong price correlation to market volumes

Figure 5: Valuation sensitivity to derivatives volumes Valuation sensitivity to derivatives daily trading volumes and P/E

175

14.00

150

12.00

125

10.00

100

8.00

75

6.00

50

4.00

25

2.00

-

-

Share price ($)

SGX share price vs quarterly equity market volumes (S$ mn)

Turnover (S$bn)

Avg Daily Turnover (S$bn)

80.0

Growth (%pa)

Turnover (S$bn)

Figure 2: Equity turnover down 13% YoY in November...

PE (x) 14x 16x 18x 20x 22x 24x 26x 28x 30x 32x

0.55 -48% -40% -33% -26% -18% -11% -3% 4% 12% 19%

Average daily derivatives t/o ('mn contracts) - 2016E 0.60 0.65 Base= 0.68 0.75 0.80 -49% -45% -43% -39% -36% -41% -38% -35% -31% -27% -34% -30% -26% -22% -18% -27% -22% -18% -13% -9% -19% -14% -10% -5% 0% -12% -6% -2% 4% 9% -5% 1% 6% 13% 18% 3% 9% 15% 21% 28% 10% 17% 23% 30% 37% 17% 25% 31% 39% 46%

0.85 -33% -24% -14% -4% 5% 15% 24% 34% 43% 53%

1Q16

3Q15

1Q15

3Q14

1Q14

3Q13

1Q13

3Q12

1Q12

3Q11

1Q11

3Q10

1Q10

3Q09

1Q09

3Q08

1Q08

3Q07

1Q07

3Q06

1Q06

3Q05

1Q05

3Q04

1Q04

3Q03

1Q03

Source for Figures 1-5: Company data, Reuters, Credit Suisse estimates

The author of this report wishes to acknowledge the contributions made by Zichen Xu, an employee of Evalueserve Research Hong Kong Ltd, a third-party provider to Credit Suisse of research support services.

Singapore Exchange (SGXL.SI / SGX SP)

2

07 December 2015

Further weakening in November We highlight that Singapore equity market activity has been somewhat subdued over the last year or so, but is starting to show some signs of recovery following some of the structural reforms made, especially the changes to board lot sizes (allowing for greater retail participation in larger blue chip stocks). Securities market income (30% of group revenues) Equities market turnover (in value terms) was down 13% YoY. Average daily turnover (ADT) of S$0.97 bn was down 13% YoY (down 8% MoM). We highlight that equity trading volumes have slowed recently with 4Q15 (calendar year) ADT of S$1.01 bn so far relative to S$1.24 bn for 3Q15, and the 2014 average of S$1.1 bn. Figure 7: …with ADT at S$0.97 bn (CS 1Q16E: S$1.1 bn)

Securities market monthly turnover (S$ bn)

Monthly average daily turnover (S$ bn) 80%

70.0

60%

60.0

40%

50.0

20%

4yr CAGR (%pa) 40.0

0%

3.5

3.0

Avg Daily Turnover (S$bn)

80.0

Growth (%pa)

Turnover (S$bn)

Figure 6: Equity turnover down 13% YoY in November…

2.5

2.0 CS FY16E = S$1.1bn

1.5

30.0

-20%

20.0

-40%

10.0

-60%

0.5

0.0

-80%

-

1.0

Oct-15 Jul-15 Apr-15 Jan-15 Oct-14 Jul-14 Apr-14 Jan-14 Oct-13 Jul-13 Apr-13 Jan-13 Oct-12 Jul-12 Apr-12 Jan-12 Oct-11 Jul-11 Apr-11 Jan-11 Oct-10 Jul-10 Apr-10 Jan-10 Oct-09 Jul-09 Apr-09 Jan-09 Oct-08 Jul-08 Apr-08 Jan-08 Oct-07 Jul-07 Apr-07 Jan-07

Oct-15 Jul-15 Apr-15 Jan-15 Oct-14 Jul-14 Apr-14 Jan-14 Oct-13 Jul-13 Apr-13 Jan-13 Oct-12 Jul-12 Apr-12 Jan-12 Oct-11 Jul-11 Apr-11 Jan-11 Oct-10 Jul-10 Apr-10 Jan-10 Oct-09 Jul-09 Apr-09 Jan-09 Oct-08 Jul-08 Apr-08 Jan-08 Oct-07 Jul-07 Apr-07 Jan-07

Source: SGX

Annual average

Source: SGX

Depository services (15% of revenues) Depository services fees are based more on equity volumes than value, with volumes down 27% YoY in November. Figure 8: Velocity decreased to 30%...

Figure 9: …with volumes down 27% YoY

Equity market velocity (% annualised)

Monthly securities market turnover (mn) 120,000

120.0

350% 300%

100,000

100.0

Velocity (%)

80.0

60.0

80,000

200%

4yr CAGR (%pa) 150% 60,000 100%

40.0

40,000

20.0

20,000

Growth (%pa)

Turnover (S$mn)

250%

50% 0% -50%

0

-

Oct-15 Jul-15 Apr-15 Jan-15 Oct-14 Jul-14 Apr-14 Jan-14 Oct-13 Jul-13 Apr-13 Jan-13 Oct-12 Jul-12 Apr-12 Jan-12 Oct-11 Jul-11 Apr-11 Jan-11 Oct-10 Jul-10 Apr-10 Jan-10 Oct-09 Jul-09 Apr-09 Jan-09

Oct-15 Jul-15 Apr-15 Jan-15 Oct-14 Jul-14 Apr-14 Jan-14 Oct-13 Jul-13 Apr-13 Jan-13 Oct-12 Jul-12 Apr-12 Jan-12 Oct-11 Jul-11 Apr-11 Jan-11 Oct-10 Jul-10 Apr-10 Jan-10 Oct-09 Jul-09 Apr-09 Jan-09 Oct-08 Jul-08 Apr-08 Jan-08 Oct-07 Jul-07 Apr-07 Jan-07

Source: SGX

-100%

Source: SGX

Singapore Exchange (SGXL.SI / SGX SP)

3

07 December 2015

Derivatives market income (35% of group revenues) Derivatives market volumes growth improved with volumes rising 13% YoY (up 20% MoM), due to stronger China A50 futures product in November, which was up 42% MoM (48% of total volumes in November, up from 41% of total volumes in October, but down from 50% in August), while futures volume for MSCI Taiwan, Nikkei 225 and CNX Nifty decreased by 3% MoM. Figure 11: …with China A50 being the largest product

Figure 10: Derivatives up 13% YoY in November… Derivative market monthly turnover (mn)

Derivative market quarterly turnover mix

25.0

2Q16E

160%

22.5

Other 15%

135% 110%

Nikkei 225 op 2%

17.5 85%

15.0

4 yr CAGR (%pa) 12.5

60%

10.0

Growth (%pa)

Derivative contract volumes (mn)

20.0

India Nifty 11%

China A50 44%

35%

7.5 10% 5.0

Nikkei 225 19%

-15%

2.5 0.0

-40%

Oct-15

Jul-15

Apr-15

Jan-15

Oct-14

Jul-14

Apr-14

Jan-14

Oct-13

Jul-13

Apr-13

Jan-13

Oct-12

Jul-12

Apr-12

Jan-12

Oct-11

Jul-11

Apr-11

Jan-11

Oct-10

Jul-10

Apr-10

Jan-10

Oct-09

Jul-09

Apr-09

Jan-09

MCSI Taiwan 9%

Source: Company data

Source: Company data, Reuters

Figure 12: Volumes weak dragged by China A50 …

Figure 13: ... China A50 up to 48% from 41% in October

Derivative market monthly turnover (mn)

Derivative market quarterly turnover mix

24.0

160%

21.0

135%

18.0

110%

15.0

85%

12.0

60%

9.0

35%

6.0

10%

3.0

-15%

0.0

-40%

100% 90%

Derivative contract volumes mix (%)

Growth (%pa)

Derivative contract volumes (mn)

80%

40% 30% 20% 10%

Oct-15

Aug-15

Jun-15

Nifty futures

Apr-15

Feb-15

Dec-14

Oct-14

MSCI Taiwan futures

Aug-14

Jun-14

Apr-14

Feb-14

Dec-13

Oct-13

Aug-13

China A50 future

Jun-13

Apr-13

Feb-13

Dec-12

Oct-12

Aug-12

Source: Company data

Jun-12

Nikkei 225 futures

Apr-12

Feb-12

Dec-11

Oct-11

Aug-11

Nifty futures

Jun-11

MSCI Taiwan futures CAGR (%pa)

50%

Apr-11

China A50 future Growth (%pa)

60%

0%

Nov-15 Sep-15 Jul-15 May-15 Mar-15 Jan-15 Nov-14 Sep-14 Jul-14 May-14 Mar-14 Jan-14 Nov-13 Sep-13 Jul-13 May-13 Mar-13 Jan-13 Nov-12 Sep-12 Jul-12 May-12 Mar-12 Jan-12 Nov-11 Sep-11 Jul-11 May-11 Mar-11 Jan-11

Nikkei 225 futures Other

70%

Other

Source: Company data

Listing fees (10% of group revenues) There was no IPO in the month. Funds raised in the bond market remained the main source of funding, with S$14.0 bn raised in November. Figure 14: Number of listed companies was steady …

Figure 15: … with bonds the main source of new listings

SGX market capitalisation (S$ bn) and listed companies

New funds raised (S$ mn) and new listings

1,200

825

28

60,000

24

50,000

20

40,000

16

30,000

12

20,000

8

10,000

4

775 600 750 400 725

200

2Q16E

1Q16

4Q15

3Q15

2Q15

1Q15

4Q14

3Q14

2Q14

1Q14

Bonds

4Q13

3Q13

2Q13

1Q13

4Q12

Equities

3Q12

2Q12

1Q12

4Q11

3Q11

2Q11

1Q11

4Q10

Source: SGX

Listed

0

3Q10

Oct-15 Jul-15 Apr-15 Jan-15 Oct-14 Jul-14 Apr-14 Jan-14 Oct-13 Jul-13 Apr-13 Jan-13 Oct-12 Jul-12 Apr-12 Jan-12 Oct-11 Jul-11 Apr-11 Jan-11 Oct-10 Jul-10 Apr-10 Jan-10 Oct-09 Jul-09 Apr-09 Jan-09 Oct-08 Jul-08 Apr-08 Jan-08 Oct-07 Jul-07 Apr-07 Jan-07

Mkt cap

-

2Q10

700

1Q10

0

New listings

800

New funds raised (S$mn)

800

Listed companies

Market capitalisation (S$bn)

1,000

70,000

New listings

Source: Company data, Credit Suisse estimates

Singapore Exchange (SGXL.SI / SGX SP)

4

07 December 2015

Valuation We derive our S$8.00 per share valuation primarily using a sum-of-the parts P/E multiple, placing multiples of the various divisional revenues depending on our view of the future growth profile (and similarly for group expenses, which are not broken down by division). The average implied P/E is about 26x (higher than SGX’s long-term average of 21x). We also undertake a dividend discount model (DDM) valuation, assuming continuation of its historical 90% dividend payout ratio, using an 8.3% WACC (a 2.5% risk-free rate, a 5.0% equity risk premium and 1.15 beta) and a 3.0% terminal growth rate. Figure 16: Credit Suisse's sum-of-the parts valuation DDM

SOTP

-44%

144%

Share price S$

7.67

Capital gain:

4.3%

7-Dec-15 PE (x)

8.18

8.18 25.3x

8.17 26.6x

8.02 25.7x

8.12 26.3x

CS valuation S$

8.00

Dividend yld:

2.8%

FY05 Jun-05

FY10 Jun-10

FY11 Jun-11

FY12 Jun-12

FY13 Jun-13

FY14 Jun-14

FY15 Jun-15

FY16E Jun-16

FY17E Jun-17

Sum of the parts Securities market

144

296

289

Dervatives market

50

131

142

Listing fees / issuer services

41

64

66

7

82

91

Market data

16

31

32

Member services / connectivity

11

32

39

244 4,150 168 3,351 62 985 94 1,177 36 397 43 432 1 13 648 10,072 -106 -1,059 -17 -130 -63 -629 -59 -593 -245 -2,410 403 833

267 4,546 203 4,061 65 1,044 94 1,178 34 373 48 478 3 34 715 11,237 -123 -1,225 -18 -133 -61 -613 -61 -611 -263 -2,583 452 889

227 3,857 209 4,174 78 1,252 95 1,188 35 386 42 415 1 14 687 10,870 -127 -1,265 -20 -153 -59 -587 -66 -657 -271 -2,662 416 922

209 3,558 296 5,913 88 1,401 104 1,302 37 403 45 446 1 10 779 12,587 -150 -1,500 -23 -170 -62 -621 -91 -912 -326 -3,202 453 976

205 3,483 306 6,129 87 1,388 127 1,593 40 436 49 495 1 8 815 13,036 -173 -1,727 -24 -183 -66 -664 -101 -1,013 -365 -3,586 451 1,036

233 3,953 322 6,443 91 1,450 153 1,916 43 469 55 548 1 8 897 14,240 -183 -1,829 -26 -192 -70 -697 -106 -1,061 -384 -3,779 513 1,158

7,193 6.72 0.27 24.7x

8,071 7.53 0.31 24.0x

7,735 7.21 0.30 24.4x

8,766 8.09 0.32 25.7x

8,879 8.12 0.31 26.3x

9,840 8.92 0.35 25.3x

Interactive valuation

Depository services

Other income Total revenue

6

4

2

275

640

661

Staff costs

-63

-111

-107

Premises

-16

-20

-19

IT related

-18

-55

-67

Others

-30

-51

-59

Total expenses

-127

-237

-252

EBITDA

148 -

403 -

409 -

-

-

-

Net tangible assets Valuation per share EPS PE (x)

Rating: NEUTRAL

7.1%

Multiple x 15 17.0x

CAGR (%pa) 7yr 2yr 6.9%

-9.2%

20.0x 0 16.0x

16.4%

13.0%

5.1%

-2.0%

12.5x

38.4%

7.2%

11.0x

10.9%

10.0x

8.8% 16.1%

10.0x

-18.1%

-43.2%

15.5x

11.3%

0.6%

10.0x

6.7%

-2.2%

7.5x

1.0%

-7.7%

10.0x

16.8%

7.2%

10.0x

9.0%

7.6%

9.8x

8.6%

1.7%

17.0%

Our sum-of-the-parts SGX valuation is S$8.00 per share, representing 26x P/E (a little higher than its historical average)

tax rate

25.1x

Source: Company data, Credit Suisse estimates

We highlight sensitivity to valuation/earnings to average daily contracts in the table below: (noting our 2016E base case is 1.09 bn, versus 1.09 bn for FY15, 1.14 bn for FY14 and 1.5 bn for FY13). Valuation sensitivity Figure 17: Valuation sensitivity to derivatives volumes (FY16E = 0.68mn, FY17E 0.70mn) PE (x) 14x 16x 18x 20x 22x 24x 26x 28x 30x 32x

0.55 -48% -40% -33% -26% -18% -11% -3% 4% 12% 19%

Average daily derivatives t/o ('mn contracts) - 2016E 0.60 0.65 Base= 0.68 0.75 0.80 -49% -45% -43% -39% -36% -41% -38% -35% -31% -27% -34% -30% -26% -22% -18% -27% -22% -18% -13% -9% -19% -14% -10% -5% 0% -12% -6% -2% 4% 9% -5% 1% 6% 13% 18% 3% 9% 15% 21% 28% 10% 17% 23% 30% 37% 17% 25% 31% 39% 46%

0.85 -33% -24% -14% -4% 5% 15% 24% 34% 43% 53%

Key valuation sensitivity in derivative turnover volumes

Source: Credit Suisse estimates

Singapore Exchange (SGXL.SI / SGX SP)

5

07 December 2015

SGX: Valuation focus charts Figure 18: SGX’s price is highly correlated to market…

Figure 19: …90% payout ratio giving valuation support

SGX share price versus FTSE Straits Times index

SGX dividend yield (% p.a.) 4,500

17.50

7.0%

4,000

15.00

6.0%

3,500

10.00

3,000

7.50

2,500 SGX

5.00

2,000

2.50

1,500

-

1,000

sd +1

Dividend yield (%)

12.50

Straits Times index

SGX share price (S$)

Straits Times index

5.0%

Average 4.0%

sd -1 3.0%

Jul-15

Figure 21: …picking up from one std above market

SGX historical P/E ratio (x) – consensus 12-month fwd estimates

P/E ratio relative to FTSE Straits Times index (%)

Aug-15

Figure 20: P/E ratio below historical average…

Feb-15

Aug-14

Feb-14

Aug-13

Feb-13

Aug-12

Feb-12

Aug-11

Feb-11

Aug-10

Feb-10

Aug-09

Feb-09

Aug-08

Feb-08

Aug-07

Feb-07

Aug-06

Feb-06

Aug-05

Feb-05

Aug-04

Feb-04

Jan-15

Jul-14

Jan-14

Jul-13

Jan-13

Jul-12

Jan-12

Jul-11

Jan-11

Jul-10

Jan-10

Jul-09

Jan-09

Jul-08

Jan-08

Jul-07

Jan-07

Jul-06

Jan-06

Jul-05

Jan-05

Jul-04

Jan-04

Jul-03

2.0%

100%

35.0

90% 80%

30.0

sd +1

70% sd +1

60%

PE relative (%)

PE (x)

25.0

Average 20.0

Average 50% 40%

sd -1 30%

sd -1

20%

15.0

10% 0%

Figure 23: Strong correlation to market volumes SGX share price vs quarterly equity market volumes (S$ mn)

1Q16

Jul-15

Jan-15

Jul-14

Jan-14

Jul-13

Jan-13

Jul-12

Jan-12

Jul-11

Jan-11

Jul-10

Jan-10

Jul-09

Jan-09

Jul-08

Jan-08

Jul-07

Jan-07

Jul-06

Jan-06

Jul-05

Jan-05

Jul-04

Jan-04

Jul-03

3Q15

ROE (%pa)

Turnover (S$bn)

-

1Q15

-

3Q14

10%

1Q14

-

3Q13

2.00

1Q13

25

3Q12

20%

1Q12

2.5

3Q11

4.00

1Q11

50

ROE (%pa)

sd -1

3Q10

30%

5.0

1Q10

6.00

40%

3Q09

75

7.5

1Q09

8.00

50% Average

3Q08

100

10.0

1Q08

10.00

3Q07

125

sd +1

1Q07

60%

12.5

3Q06

12.00

1Q06

150

3Q05

70%

1Q05

15.0

3Q04

14.00

1Q04

175

3Q03

80%

1Q03

17.5

Share price ($)

SGX price to book value (x)

Price to book (x)

Jul-15

Jan-15

Jul-14

Jan-14

Jul-13

Jan-13

Jul-12

Jan-12

Jul-11

Jan-11

Jul-10

Jan-10

Jul-09

Jan-09

Jul-08

Jan-08

Jul-07

Jan-07

Jul-06

Jan-06

Jul-05

Jan-05

Jul-04

Figure 22: Price-to-book near long-term average

Jan-04

Jul-15

Jan-15

Jul-14

Jan-14

Jul-13

Jan-13

Jul-12

Jan-12

Jul-11

Jan-11

Jul-10

Jan-10

Jul-09

Jan-09

Jul-08

Jan-08

Jul-07

Jan-07

Jul-06

Jan-06

Jul-05

Jan-05

Jul-04

Jan-04

Jul-03

Jul-03

10.0

Source for Figures 18-23: Company data, I/B/E/S consensus forecasts (12-month forward), Credit Suisse estimates

Singapore Exchange (SGXL.SI / SGX SP)

6

07 December 2015

Global exchange-related comparatives Figure 24: Global exchanges—key metrics Reporting Market Monthly Company

Currency

Cap

Daily Monthly

Price

Volume Volume Liquidity

4-Dec

US$m

US$m

US$m

%

Australia & NZ ASX.AX ASX CPU.AX Computershare IRE.AX Iress NZX.NZ NZX

AUD USD AUD NZD

5,788 4,708 1,160 180 11,836

343 318 63 5 729

17 16 3 0 36

5.9% 6.8% 5.4% 2.6% 6.2%

Asia BMYS.KL 0388.HK MCEI.BO PSE.PS 8697.T SGXL.SI

Bursa Malaysia HKEx MCX Philipine SE Japan Exchange SGX

MYR HKD INR PHP JPY SGD

1,067 32,124 654 455 8,462 5,869 48,630

21 5,564 34 na 577 340 6,536

1 278 2 na 29 17 327

2.0% 17.3% 5.1% na 6.8% 5.8% 13.4%

Africa & Middle East JSEJ.J JSE DFM.DU Dubai Fin Market

ZAR AED

767 2,592 3,359

28 47 74

1 2 4

3.6% 1.8% 2.2%

Europe BME.MC DB1Gn.F EXCr.AT IAP.L LSE.L MOEX.MM GPW.WA

Bolsas Y Mercados Deutsche Boerse Hellenic Exchanges ICAP LSE Moscow Exchange Warsaw Exchange

EUR EUR EUR GBP GBP RUB PLN

2,999 16,682 372 4,938 13,757 3,054 408 42,210

195 30 24 81 259 1,405 11 195

10 1 1 4 13 70 1 10

6.5% 0.2% 6.5% 1.6% 1.9% 46.0% 2.8% 0.5%

Americas BOLSAA BVMF3.SA CBOE CTIP3.SA CME ICE MKTX NDAQ X.TO

Bolsa Mexicana Bovespa CBOE Cetip CME ICE MarketAxess NASDAQ OMX Toronto Exchange

MXN BRL USD BRL USD USD USD USD CAD

824 5,591 5,728 2,594 33,712 28,988 4,247 9,680 2,506 93,868

61 180 259 106 973 482 148 575 47 2,831

3 9 13 5 49 24 7 29 2 142

7.4% 3.2% 4.5% 4.1% 2.9% 1.7% 3.5% 5.9% 1.9% 3.0%

196,545

10,291

Global exchange related

52 Week

12mth

12mth Inv'ment

high/low Target Return Rating

Year

Consensus

End

PE (x)*

EPSg Cost to EBITDA P / BV ROE P / NTA ROTE Payout 2yr income margin (x) (%pa) (x) (%pa) ratio (%) 12mth forward diluted (Credit Suisse forecasts)

PE (x)

local

local

%

35.04-44.52 9.29-13.52 8.87-11.20 0.95-1.21

40.00 12.00 10.00 1.13

2.9% 6.3% 6.4% 17.8%

NTRL OPFM NTRL OPFM

30-Jun 30-Jun 31-Dec 31-Dec

18.6x 14.7x 22.4x 19.1x 18.7x

18.9x 14.4x 22.9x 19.1x 18.8x

3% 7% 13% 13% 9%

23% 72% 69% 65% 58%

74% 59% 60% 54% 62%

2.1x 3.3x 4.5x 5.1x 3.7x

10.9% 22.9% 19.5% 26.9% 20.0%

8.38 7.64-8.98 8.85 10.3% 206.00 168.70-309.40 170.00 -14.7% 854.35 0,815-1,240 NR na 293 290-358 NR na 1,900 1,316-2,198 1,240 -32.5% 7.67 7.03-8.78 8.00 8.2%

NTRL UPFM NR NR UPFM NTRL

31-Dec 31-Dec 30-Mar 31-Dec 30-Mar 31-Dec

20.7x 28.6x 26.2x 25.4x 34.5x 21.6x 26.2x

19.2x 32.5x 26.2x 25.4x 24.3x 23.4x 25.2x

13% 3% 30% na 10% 14%

42% 24% 52% na na na 39%

68% 78% 87% na na na 78%

5.8x 7.6x 3.5x na 2.0x 7.5x 5.3x

30.0% 24.0% 13.3% na 16.1% 33.3% 23.3%

6.1x 17.5x 3.5x na 3.0x 7.5x 7.5x

31.9% 53.9% 13.3% na 12.5% 32.3% 28.8%

NR NR

31-Dec 31-Dec

29.0x 29.0x

29.0x 29.0x

20% 20%

na 26% 26%

98% 98%

na 1.2x 1.2x

na 4.0% 4.0%

na 1.2x 1.2x

na 4.0% 4.0%

28% 52% 58% 78% 56% 24% 46% 49%

70% 61% 70% 66% 55% 75% 70% 67%

6.3x 42.7% 3.2x 17.7%

6.3x 14.0x

42.7% 76.4%

62% na 56% 68% 59% 61% 57% 54% 58% 59% 65% 57%

40.76 11.63 9.80 1.01

126.84 111.42-148.79 1.19 0,001-0,002

33.02 79.58 5.24 502.00 2,615 93.80 38.60

NR NR

na na

0,030-0,043 0,056-0,087 0,003-0,006 409-567 2056-2699 58.51-97.00 37.75-53.00

35.00 na 75.00 -3.1% NR na 510 6.0% 2,900 12.2% 72.00 -19.1% NR na

UPFM UPFM NR NTRL OPFM NTRL NR

31-Dec 31-Dec 31-Dec 31-Mar 31-Mar 31-Dec 31-Dec

14.7x 17.1x 23.8x 17.2x 17.9x 10.5x 12.1x 16.2x

14.7x 18.3x 23.8x 16.4x 17.4x 13.2x 12.1x 16.6x

23.18 23.18-30.01 11.56 8.80-12.78 69.47 55.50-72.40 37.05 29.55-38.64 99.67 84.87-100.06 264.14 204.87-264.14 113.88 67.66-113.88 58.94 45.04-59.97 46.07 45.31-55.16

34.00 51.2% 11.50 6.1% 57.00 -16.6% 40.00 13.3% 94.00 -1.0% RSTR 79.00 -29.9% 59.00 1.1% NR na

OPFM NTRL UPFM NTRL NTRL RSTR UPFM OPFM NR

31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec

15.5x 13.1x 27.0x 16.8x 23.4x 18.9x 40.0x 16.0x 11.8x 20.3x

15.6x 10.6x 27.9x 15.8x 24.1x 18.9x 43.5x 16.4x 11.8x 20.5x

14% 3% 10% 11% 9% 17% 16% 10% 11%

52% na 44% 34% 34% 34% 45% 49% 53% 43%

20.3x 21.8x

20.3x 22.2x

11% 7%

47% 35%

5.2%

Arithmetic average Weighted average

Figure 25: Price to book (x) vs ROE (% p.a.)

4% 30%

-9% 6% 8%

1mth

1qtr

1hy

1yr

YTD

7

30

91

182

365

31-Dec

90% 44% 99% 86% 80%

4.8% 3.1% 4.3% 5.9% 4.5%

-1.4% -0.1% 2.5% -1.0% -0.5%

-0.6% 6.1% 4.2% 0.0% 2.6%

9.4% 1.1% 12.6% 11.1% 16.1% -6.2% 1.8% -1.4% 8.9% -6.2% -3.5% -7.7% 4.1% -10.6% -17.2% -13.7% 11.9% -2.7% 6.3% 3.9%

91% 90% 46% na 54% 91% 74%

4.7% 2.8% 1.8% na 2.2% 3.9% 3.1%

0.4% 2.0% -1.4% -0.6% -1.6% 1.7% 1.2%

-0.8% -3.0% -0.3% -3.0% 1.8% 0.7% -1.7%

6.2% -0.2% 17.6% -29.8% -7.0% -12.8% -2.0% -4.9% 11.3% 11.3% 6.5% -3.3% 14.4% -18.4%

2.8% 2.8%

-2.7% -2.8% -2.5% -2.4% 10.0% 5.5% 0.0% -11.9% -28.3% -36.7% -49.1% -40.8% -0.6% -9.8% -22.4% -28.9% -35.6% -30.2%

20.1% -117.8x -719.8% 16.8% -0.2x -1.0% 14.3% 2.7x 20.6% 18.6% 2.2x 18.6% 21.7% -15.4x -93.8%

89% 48% 97% 72% 23% 55% 83% 67%

6.5% 2.6% 4.0% 4.4% 1.3% 4.2% 6.9% 4.3%

-0.4% -1.6% 4.8% -1.4% -1.3% -0.7% -6.1% -1.3%

15.2% 9.8% 91.9% 35.4% 6.5% 12.3% 25.0% 10.5% 7.2% 23.8%

70% 70% 38% 84% 99% 23% 34% 16% 44% 53%

4.5% 6.6% 1.4% 5.3% 4.7% 1.2% 0.8% 1.0% 3.5% 3.2%

-3.0% -14.6% -11.0% -14.3% -11.1% -12.8% 1.7% -3.7% 13.3% 0.1% 19.7% 17.4% -3.8% 1.0% 9.4% 21.0% 14.4% 9.5% 0.7% 0.1% 17.1% 11.0% 14.4% 15.1% 2.1% 3.0% 7.8% 4.7% 14.8% 12.4% 1.7% 0.7% 16.5% 12.1% 17.5% 20.5% 6.6% 14.1% 20.1% 32.0% 67.2% 58.8% 0.5% 1.2% 17.2% 17.8% 29.0% 22.9% -1.1% -5.1% -1.1% -10.1% -11.3% -9.0% 1.4% 1.6% 12.3% 9.9% 18.8% 17.5%

65% 62%

3.7% 3.0%

6.0x 38.3% 7.2x 67.7% 25.5x 91.4% 34.3x 217.3% -5.8x -23.9% 2.3x 12.3% 10.9x 25.0% -6.5x -39.7% 0.8x 7.2% 8.3x 44.0%

4.7x 22.5% 4.3x 18.5%

0.9x 2.2x

-0.2% 3.3%

4.8% 15.7% -2.6% 1.7% 0.3% 4.1% 11.0%

3.5% 20.0% 1.5% -0.9% 34.0% -1.8% 19.0%

-2.7% -3.7% -6.7% -2.5% 2.7% -3.3% 0.4% 10.0% 34.8% 34.0% -1.1% 11.3% 11.8% -14.7% 15.6% 5.8% 10.4% -8.1% 20.4% 11.0% 0.7% 6.5% 10.9% 16.2% 17.7% 3.3% 26.8% 70.5% 50.4% 58.8% -5.2% -13.5% -23.2% -15.1% -15.5% -0.4% 5.1% 11.0% 24.6% 25.0%

0.0% 0.7%

0.0% 0.4%

7.6% 11.3%

3.0% 2.4%

10.1% 17.4%

11.7% 18.6%

30.0x

Expensive

Expensive

PER = 30x

PER = 22.6x

8.0x

CBOE

25.0x HKEx

P - = E

6.0x

P BV

/

SGX

Bursa Malaysia

5.0x

NZX

Iress Deutsche Boerse

4.0x

MCX

Computershare

3.0x

PER = 10x

LSE ICE BolsaASX Mexicana

2.0x

CME

Warsaw Exchange

NASDAQ OMX

P = NTA

PER = 22.6x

E / NTA

HKEx

15.0x

Deutsche Boerse

Bolsa Mexicana MarketAxess

10.0x

Bursa Malaysia SGX

5.0x Japan Exchange

0.0x

Bolsas Y Mercados

ICE

Bovespa

ASX

NZX

MCX

Warsaw Exchange

Toronto Exchange Hellenic Exchanges

Japan Exchange

-5.0x

Toronto Exchange Bovespa

1.0x

P E

20.0x

E BV

Price / Net tangible assets (P / NTA)

7.0x

Price / Book Value (P / BV)

2.4x 1.0x 25.5x 5.6x 1.6x 2.3x 10.9x 1.7x 0.8x 5.8x

Price movement (%) 1wk

Figure 26: Price to NTA (x) vs ROTE (% p.a.)

9.0x

0.0x 0.0%

3.2x 2.9x 1.9x 2.2x 3.3x

5.4x 28.6% -6.5x -44.9% -18.0x -78.7% 21.4x 112.1% 0.6x 4.3%

Div Yld (%pa)

CME

Inexpensive Inexpensive

Hellenic Exchanges

5.0%

10.0%

15.0% 20.0% 25.0% Return on Equity (% EPS / BV)

30.0%

35.0%

-10.0x -30.0%

40.0%

Figure 27: Global exchange related—P/E (x)

-15.0%

0.0%

15.0%

30.0% 45.0% 60.0% Return on NTA (% EPS / BNTA

75.0%

90.0%

105.0%

Figure 28: SGX vs Asian exchanges—P/E (x)

40.0x

40.0x

35.0x

35.0x Asian exchanges

30.0x

Asia

30.0x

25.0x Nth America

25.0x

20.0x

Australia

20.0x

15.0x

SGX 15.0x

10.0x Europe 5.0x

10.0x

Dec-15

Jun-15

Dec-14

Jun-14

Dec-13

Jun-13

Dec-12

Jun-12

Dec-11

Jun-11

Dec-10

Jun-10

SGX

Dec-09

Jun-09

Dec-08

Jun-08

Dec-07

Jun-07

Dec-06

Jun-06

Dec-05

Jun-05

Dec-04

Jun-04

Dec-03

Dec-15

North America

Jun-15

Dec-14

Jun-14

Dec-13

Jun-13

Dec-12

Jun-12

Asia

Dec-11

Jun-11

Dec-10

Europe

Jun-10

Dec-09

Jun-09

Dec-08

Jun-08

Dec-07

Jun-07

Dec-06

Jun-06

Dec-05

Jun-05

Dec-04

Jun-04

Dec-03

Australia

Asia

Source for Figures 24-28: Reuters, Credit Suisse (* I/B/E/S consensus) 12-month forward rolling forecasts

Singapore Exchange (SGXL.SI / SGX SP)

7

07 December 2015

SGX: Key operational focus charts Figure 30: …with a stable dividend pay-out ratio

Figure 29: EPS growth fluctuates… SGX: Earnings per share (EPS)/EPS growth YoY (%) 45.0

SGX: Dividend per share (DPS)/pay-out ratio (%)—underlying EPS 90%

F'casts

150%

F'casts

125%

60% 7yr CAGR (%pa)

30.0

30.0

30% 25.0 15% 20.0 0% 15.0

EPS growth (%pa)

45%

Dividend per share (DPS)

35.0

-15%

100% 20.0 75%

10.0 50%

10.0

-30%

5.0

-45%

-

-60%

FY10

FY11

FY12

FY13

FY14

FY15

FY16E

FY17E

1,050 900 7yr CAGR = 0% pa

50%

400

40%

350

-10% 300

Expenses (S$mn)

0%

450

Revenue growth (%pa)

10%

150

0

Securities market Other

FY14

Derivatives market Revenue growth (%pa)

Final DPS (cps)

FY15

FY16E

Payout ratio (%)

FY15

FY16E

250

7yr CAGR = 5 %pa 20%

200

10%

100

0%

-30%

50

-40%

0

-10% FY08

FY17E

Listing fees 7yr CAGR (%pa)

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16E

Premises

Other

Depreciation

Expense growth (%pa)

7yr CAGR (%pa)

Figure 34: …with ‘stable’ revenue growth ‘Stable’ revenues (S$ mn)/revenue growth YoY (%) 400

Other 10%

350

FY17E

Staff costs

SGX revenue mix (FY16E)

40%

F'casts

30%

7yr CAGR (%pa)

300

Revenue (S$mn)

Securities market 25%

40%

F'casts

Figure 33: 75-85% of revenue is market-related…

Listing fees 11%

FY17E

150

-20%

FY13

FY14

300

20% 600

FY12

FY13

30%

30%

750

FY11

FY12

SGX: Expenses (S$ mn)/expense growth YoY (%) F'casts

FY10

FY11

Figure 32: …with expense growth at a similar pace

SGX: Revenues (S$ mn)/revenue growth YoY (%)

FY09

FY10

Base DPS (cps)

Figure 31: Revenues growth stable…

FY08

FY09

20%

250 200

10%

150

0%

100

Depository services 16%

Expense growth (%pa)

FY09

25% FY08

Revenue growth (%pa)

FY08

Revenue (S$mn)

Payout ratio (%)

40.0

Earnings per share (EPS)

40.0

75%

-10%

50

0

-20% FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16E

FY17E

Stock exchange listing fees

Market data

Depository services

Other income

Revenue growth (%pa)

8yr CAGR (%pa)

Derivatives market 38%

Source for Figures 29-34: Company data, I/B/E/S consensus forecasts (12-month forward), Credit Suisse estimates

Singapore Exchange (SGXL.SI / SGX SP)

8

07 December 2015

Singapore Exchange: Key financials Figure 35: SGX income statement Growth (% p.a.) FY12

FY13

FY14

FY15

FY16E

FY17E

FY18E

FY16E

FY17E

FY18E

192 4 49

213 4 51

178 8 40

164 8 38

160 8 37

181 9 42

210 10 49

-8% -1% -7%

-2% 1% -1%

14% 10% 13%

Securities market income

244

267

227

209

205

233

270

-8%

-2%

14%

Derivatives fees Structured warrants fees

163 4

201 2

209 0

296 0

306 0

322 0

350 0

42%

4%

5%

Derivatives market income

168

203

209

296

306

322

350

42%

4%

5%

94 62 43 36 1

94 65 48 34 3

95 78 42 35 1

104 88 45 37 1

127 87 49 40 1

153 91 55 43 1

184 96 61 46 1

10% 12% 7% 4%

22% -1% 11% 8%

20% 4% 11% 7%

Total stable revenue

236

245

251

274

304

342

387

9%

11%

13%

Total operating income

648

715

687

779

815

897

1,007

13%

5%

10%

-106 -17 -63 -59 -245

-123 -18 -61 -61 -263

-127 -20 -59 -66 -271

-150 -23 -62 -91 -326

-173 -24 -66 -101 -365

-183 -26 -70 -106 -384

-192 -27 -73 -111 -403

19% 11% 6% 39% 20%

15% 7% 7% 11% 12%

6% 5% 5% 5% 5%

403

452

416

453

451

513

604

9%

-1%

14%

-

-

-

-

-

-

-5 -38

-10 -38

5 -44

5 -51

5 -54

5 -58

5 -62

359

404

377

407

402

460

546

8%

-1%

14%

Year-end 30 Jun (S$ mn) Income statement Clearing fees Processing fees Access fees

Depository services Listing fees / issuer services Member services / connectivity Market data Other revenue

Staff costs Premises IT related Other Total operating expenses EBITDA Investment gains/losses Depreciation Profit before tax Taxes

-64

-72

-59

-63

-61

-67

-79

7%

-3%

9%

Underlying net profit

296

332

318

344

340

393

467

8%

-1%

15%

-4 0

4 0

2 0

0 0

0 0

0 0

0 0

292

336

320

344

340

393

467

8%

-1%

15%

-

-

-

-

-

-

-

38% 26% 15% 9% 12%

37% 28% 13% 9% 12%

33% 30% 14% 11% 11%

27% 38% 13% 11% 11%

25% 38% 16% 11% 11%

26% 36% 17% 10% 11%

27% 35% 18% 9% 11%

-6% 8% 0% 0% -1%

-2% 0% 2% -1% 0%

1% -2% 1% -1% 0%

Associates Exceptionals Reported profit Revenue breakdown (%) Securities market Derivatives market Depository services Listing fees Other

Source: Company data, Credit Suisse estimates

Singapore Exchange (SGXL.SI / SGX SP)

9

07 December 2015

SGX: Key financials (cont’d) Figure 36: SGX key metrics, key assumptions and balance sheet Growth (% p.a.) (S$ mn)

FY12

FY13

FY14

FY15

FY16E

FY17E

FY18E

FY16E

FY17E

FY18E

Shares Underlying EPS

1,072 0.27

1,073 0.31

1,083 0.30

1,093 0.32

1,103 0.31

1,113 0.35

1,123 0.42

1% 7%

1% -2%

1% 14%

PE (x)

28.2x

24.5x

25.9x

24.3x

24.9x

21.7x

18.4x

0.27

0.28

0.28

0.28

0.28

0.32

0.38

0%

0%

14%

99% 3.5%

89% 3.7%

94% 3.7%

87% 3.7%

89% 3.7%

87% 4.2%

87% 4.9%

-7%

1%

-1%

9.9x 35.1% 17.5%

9.3x 39.4% 19.4%

9.0x 35.4% 18.5%

8.6x 36.6% 19.3%

8.2x 34.0% 17.7%

7.4x 37.2% 19.5%

6.5x 39.4% 21.6%

1% 1%

-3% -2%

3% 2%

62% 38% 18%

63% 37% 18%

61% 39% 15%

58% 42% 15%

55% 45% 15%

57% 43% 14%

60% 40% 15%

-2% 2% 0%

-3% 3% 0%

2% -2% -1%

Key financial metrics

DPS DPS special Payout ratio (%) Dividend yield (%) Price to book value (x) Return on equity (%pa) Return on assets (%pa) Key operating ratios (%) EBITDA margin (%) Cost to income ratio (%) Tax rate (%) Avg daily equity t/o (S$ bn)

1.3

1.5

1.1

1.1

1.1

1.2

1.4

-4%

0%

12%

Avg equity market cap (S$ bn) Equity turnover velocity (%) Securities fee (bp)

831 40 7.4

943 39 7.4

960 30 7.8

1,017 27 7.5

951 29 7.4

1,032 30 7.4

1,117 33 7.4

6% -10% -3%

-6% 7% -2%

9% 5% 0%

302.8

404.1

415.0

642.4

681.1

699.2

758.7

2.1

2.0

2.0

1.8

1.8

1.8

1.8

55% -8%

6% -3%

3% 1%

698 779 145

763 757 136

757 572 173

790 654 201

877 686 204

921 720 204

978 757 247

4% 14% 16%

11% 5% 2%

5% 5% 0%

107

139

139

157

157

157

186

13%

0%

0%

1,729

1,794

1,641

1,802

1,924

2,003

2,167

10%

7%

4%

Payables Provisions Other

796 7 92

783 7 115

616 8 95

718 9 97

760 10 118

718 10 118

724 10 118

17% 16% 2%

6% 3% 21%

-6% 0% 0%

Total liabilities

896

906

719

825

888

846

852

15%

8%

-5%

Net assets per share

833

889

922

976

1,036

1,158

1,316

6%

6%

12%

0.78

0.83

0.85

0.89

0.94

1.04

1.17

Average daily derivatives t/o ('000) Fee per derivative contract (S$) Balance sheet Cash Receivables Fixed assets & software Intangibles Other Total assets

Source: Company data, Credit Suisse estimates

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07 December 2015

Companies Mentioned (Price as of 04-Dec-2015) ASX (ASX.AX, A$40.76) ATHEX (EXCr.AT, €5.24) BM&F Bovespa (BVMF3.SA, R$11.56) Bolsa Mexicana de Valores (BOLSAA.MX, MXN23.18) Bolsas Y Mercados Espanoles (BME.MC, €33.02) Bursa Malaysia (BMYS.KL, RM8.38) CBOE Holdings Inc. (CBOE.OQ, $69.47) CME Group Inc. (CME.OQ, $99.67) Cetip (CTIP3.SA, R$37.05) Computershare (CPU.AX, A$11.63) Deutsche Boerse (DB1Gn.F, €79.58) Dubai Financial Market (DFM.DU, Dhs1.19) GPW (GPW.WA, zł38.6) Hong Kong Exchanges and Clearing (0388.HK, HK$206.0) ICAP Plc (IAP.L, 502.0p) IRESS (IRE.AX, A$9.8) IntercontinentalExchange, Inc. (ICE.N, $264.14) JSE (JSEJ.J, R126.84) Japan Exchange Group (8697.T, ¥1,900) London Stock Exchange (LSE.L, 2615.0p) MarketAxess (MKTX.OQ, $113.88) Moscow Exchange (MOEX.MM, Rbl93.8) Multi Commodity Exchange of India (MCEI.BO, Rs854.35) NASDAQ Group Inc. (NDAQ.OQ, $58.94) NZX (NZX.NZ, NZ$1.01) PH Stock Exch (PSE.PS, P293.0) Singapore Exchange (SGXL.SI, S$7.67, NEUTRAL, TP S$8.0) TMX Grp (X.TO, C$46.07)

Disclosure Appendix Important Global Disclosures I, Arjan van Veen, certify that (1) the views expressed in this report accurately reflect my personal views about all of the subject companies and securities and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report. 3-Year Price and Rating History for Singapore Exchange (SGXL.SI) SGXL.SI Date 07-Jan-13 22-Jan-13 05-Feb-13 04-Sep-13 17-Oct-13 04-Dec-13 10-Feb-14 03-Jul-14 06-Feb-15 22-Apr-15 06-May-15

Closing Price (S$) 7.10 7.54 7.70 7.21 7.29 7.12 6.72 6.96 8.14 8.52 8.37

Target Price (S$) 6.75 7.75 9.25 9.00 9.25 8.25 7.75 7.50 7.75 8.25 10.00

Rating N O

N

O

N EU T RA L O U T PERFO RM

* Asterisk signifies initiation or assumption of coverage.

The analyst(s) responsible for preparing this research report received Compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities

As of December 10, 2012 Analysts’ stock rating are defined as follows: Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark*over the next 12 months. Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months. Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months. *Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractiv e, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin American a nd non-Japan Asia stocks, ratings

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are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark; prior to 2nd October 2012 U.S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiv eness of a stock’s total return potential within an analyst’s coverage universe. For Australian and New Zealand stocks, the expected total return (ETR) calculation includes 12 -month rolling dividend yield. An Outperform rating is assigned where an ETR is greater than or equal to 7.5%; Underperform where an ETR less tha n or equal to 5%. A Neutral may be assigned where the ETR is between -5% and 15%. The overlapping rating range allows analysts to assign a rating that puts ETR in the context of associated risks. Prior to 18 May 2015, ETR ranges for Outperform and Underperform ratings did not overlap with Neutral thresholds between 15% and 7.5%, which was in operation from 7 July 2011.

Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances. Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward. Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation: Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months. Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months. Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months. *An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cover multiple sectors.

Credit Suisse's distribution of stock ratings (and banking clients) is: Global Ratings Distribution

Rating

Versus universe (%)

Of which banking clients (%)

Outperform/Buy* 59% (32% banking clients) Neutral/Hold* 28% (36% banking clients) Underperform/Sell* 12% (25% banking clients) Restricted 1% *For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, and Underperform most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis. (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdings, and other individual factors.

Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein. Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: http://www.csfb.com/research-andanalytics/disclaimer/managing_conflicts_disclaimer.html Credit Suisse does not provide any tax advice. Any statement herein regarding any US federal tax is not intended or written to be used, and cannot be used, by any taxpayer for the purposes of avoiding any penalties. Price Target: (12 months) for Singapore Exchange (SGXL.SI) Method: Our target price of S$8.00 for Singapore Exchange is based on a blended sum-of-the-parts approach and DCF equating to a 12-month forward P/E (price-to-earnings) of 25x. Risk:

The primary risk to our S$8.00 target price for Singapore Exchange is a downturn in securities and derivatives market volumes and duration of the decline, due to a general economic downturn in Singapore and the South-East Asian region, which might negatively affect the equities market sentiment. SGX also faces competition from its peers, in terms of attracting new companies to list in respective Exchanges and products offered, which would directly affect its revenue.

Please refer to the firm's disclosure website at https://rave.credit-suisse.com/disclosures for the definitions of abbreviations typically used in the target price method and risk sections. See the Companies Mentioned section for full company names

The subject company (CME.OQ, CTIP3.SA, IAP.L, NDAQ.OQ) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse. Credit Suisse provided investment banking services to the subject company (CME.OQ) within the past 12 months. Credit Suisse provided non-investment banking services to the subject company (IAP.L) within the past 12 months Credit Suisse has managed or co-managed a public offering of securities for the subject company (CME.OQ) within the past 12 months.

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Credit Suisse has received investment banking related compensation from the subject company (CME.OQ) within the past 12 months Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (SGXL.SI, 0388.HK, BMYS.KL, BOLSAA.MX, CME.OQ, CTIP3.SA, NDAQ.OQ) within the next 3 months. Credit Suisse has received compensation for products and services other than investment banking services from the subject company (IAP.L) within the past 12 months As of the date of this report, Credit Suisse makes a market in the following subject companies (CBOE.OQ, CME.OQ, ICE.N, NDAQ.OQ). Credit Suisse may have interest in (BMYS.KL) Please visit https://credit-suisse.com/in/researchdisclosure for additional disclosures mandated vide Securities And Exchange Board of India (Research Analysts) Regulations, 2014 Credit Suisse may have interest in (MCEI.BO) As of the end of the preceding month, Credit Suisse beneficially own 1% or more of a class of common equity securities of (0388.HK, 8697.T). Credit Suisse has a material conflict of interest with the subject company (ICE.N) . Credit Suisse acted as a principal advisor to Interactive Data Corporation in Intercontinental Exchange's acquisition of Interactive Data Corporation. For other important disclosures concerning companies featured in this report, including price charts, please visit the website at https://rave.creditsuisse.com/disclosures or call +1 (877) 291-2683.

Important Regional Disclosures Singapore recipients should contact Credit Suisse AG, Singapore Branch for any matters arising from this research report. The analyst(s) involved in the preparation of this report may participate in events hosted by the subject company, including site visits. Credit Suisse does not accept or permit analysts to accept payment or reimbursement for travel expenses associated with these events. Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS--Non-Voting shares; RVS--Restricted Voting Shares; SVS--Subordinate Voting Shares. Individuals receiving this report from a Canadian investment dealer that is not affiliated with Credit Suisse should be advised that this report may not contain regulatory disclosures the non-affiliated Canadian investment dealer would be required to make if this were its own report. For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit https://www.creditsuisse.com/sites/disclaimers-ib/en/canada-research-policy.html. The following disclosed European company/ies have estimates that comply with IFRS: (DB1Gn.F, IAP.L, LSE.L). Credit Suisse has acted as lead manager or syndicate member in a public offering of securities for the subject company (CME.OQ, MOEX.MM) within the past 3 years. As of the date of this report, Credit Suisse acts as a market maker or liquidity provider in the equities securities that are the subject of this report. Principal is not guaranteed in the case of equities because equity prices are variable. Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that. Credit Suisse has entered into a strategic partnership with First NZ Capital ("FNZC"). Pursuant to this agreement, (NZX.NZ) is jointly covered by Credit Suisse and First NZ Capital. To the extent this is a report authored in whole or in part by a non-U.S. analyst and is made available in the U.S., the following are important disclosures regarding any non-U.S. analyst contributors: The non-U.S. research analysts listed below (if any) are not registered/qualified as research analysts with FINRA. The non-U.S. research analysts listed below may not be associated persons of CSSU and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account. Credit Suisse (Hong Kong) Limited .................................................................................................................................................. Arjan van Veen For Credit Suisse disclosure information on other companies mentioned in this report, please visit the website at https://rave.creditsuisse.com/disclosures or call +1 (877) 291-2683.

Singapore Exchange (SGXL.SI / SGX SP)

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Singapore Exchange (SGXL.SI / SGX SP)

BK2041

14