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Singapore’s bourse sees profit amidst global turmoil


October 4, 2008

Singapore’s bourse sees profit amidst global turmoil
Singapore Exchange (SGX), Asia's second-largest listed stock exchange, said on Friday it was confident it would report a profit this fiscal year, but that its chief executive may step down in 2009, reported Reuters.

Stock exchanges around the world are seeing falling trading volumes as global markets are gripped by turbulence and economic uncertainty, but SGX said stable revenue sources would help it stay in the black despite a plunge in fiscal fourth quarter profits.

"One third of our cost base is variable and a large part of it is bonuses," CEO Hsieh Fu Hua told shareholders at the bourse's annual general meeting.

Chief Financial Officer Seck Wai Kwong said of the S$118 million ($81.44 million) in staff costs incurred during fiscal year 2007/2008, S$50 million was paid out in bonuses and another S$10 million comprised share-based payment expenses.

The bonus payments will only kick in when net profits exceed a pre-specified return on equity, he added. Seck said that steady revenue sources, such as derivatives clearing fees, data sales and listing fees, exceeded operating expenses.

Hsieh, who has been SGX's chief executive since 2003, said he would not extend his contract, which he said ends around September 2009.

"I believe the role of any CEO should be limited in duration. There comes a time when it's time to move on," Hsieh told reporters, adding he would not leave before a successor was found.

SGX's Chairman J.Y Pillay said the exchange's plan A was to persuade Hsieh to stay and that plan B was to look for a successor.

"We will start the search for a successor very soon. We cannot assume that he will continue for a fourth term," SGX chairman J.Y. Pillay told shareholders.

SGX ranks as the second-largest listed exchange in Asia behind the Hong Kong Exchanges & Clearing and ahead of the Australian Securities Exchange Ltd.

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