Shares of Singapore Exchange Ltd. have dropped sharply, erasing about $4.2 billion in market value since their peak in late August. The stock has fallen 19% since August 26, making it the worst performer on Singapore’s Straits Times Index during this period, according to livemint.com.
The decline follows a series of downgrades by major financial institutions. Citigroup lowered its price target on SGX and placed it on a 90-day negative catalyst watch while maintaining a sell rating. JPMorgan Chase downgraded the stock to neutral, and Macquarie recommended underperform in mid-September. Citi analyst Yong Hong Tan highlighted risks from concentrated stock trading in big banks and a global selloff in bank shares.
SGX’s valuation remains elevated despite the selloff, trading at nearly 26 times its 12-month forward earnings compared to a 10-year average of 22 times and the STI benchmark’s multiple of around 16 times. Citi also cut earnings estimates, noting that sluggish iron-ore trading could reduce fee income for the exchange, further pressuring the stock.
The next key market event for SGX will be its upcoming earnings report, which investors will scrutinize for signs of recovery or further impact from volatile bank stocks and commodity trading volumes, as detailed by livemint.com.