Singapore Exchange Limited

Good morning ladies and gentlemen and to those viewing via the webcast. My name is Liana Chue from Investor Relations.

Happy New Year and a very warm welcome to SGX Group's First Half FY 2025 Results Briefing. We will begin today's session with a presentation of the financial results by our new CFO, Mr.

Daniel Koh. Dan took on the role as CFO on 1st of December 2024.

Following Dan's presentation our CEO, Mr. Loh Boon Chye will present the business updates.

We will have a question-and-answer session later on. Please wait for the microphone to reach you and do identify yourself before you ask your questions.

It is now my pleasure to invite Dan up on stage to present the financial results. Dan please.

Good morning. Thank you for joining us today.

As a keen market observer, it is enthralling for me to be standing on this side of the stage having joined SGX at such a vibrant time. Today, I am delighted to present a strong set of results as the new CFO.

SGX Group delivered strong financial performance for the first half FY 2025. Both our half year operating revenue and earnings have reached the highest levels.

Group net revenue has increased by 15.6% to S$646 million, driven by broad-based growth across all operating segments. Group expenses on an adjusted basis have stayed comparable from a year ago, while adjusted group NPAT has increased 27.3% to S$320 million.

Adjusted operating profit margin and adjusted NPAT margin have both showed strong improvement by 6.1% and 4.5% respectively. As mentioned earlier, the revenue performance was driven by broad-based growth, especially in cash equities, derivatives, and our OTC FX franchise.

Our cash equities business grew significantly driven by elevated investor interest. Net revenue increased by S$35 million or 22% and the securities daily average value or SDAV increased 31% to S$1.26 billion, driven by strong investment flows into the index stocks and REITs, on the back of rate cuts, robust market fundamentals, and other macro factors.

Our derivatives franchise, which comprises futures and options on currencies, commodities, and equities also demonstrated strong growth. This was driven by proactive steps that we have taken in broadening client participation amidst higher global market volatility.

Total net revenue from our derivative suite grew S$35 million or 14%, driven by 20% growth in overall derivative daily average volume across all asset classes. This has been partially led by our efforts in driving client expansion in the T+1 session as well as cross-selling.

T+1 traded volume contributed about 20% to the overall derivatives traded volume. Treasury income or TI was comparable against a year ago, driven by higher collateral balances from the derivatives franchise partially offset by declining interest rates.

Our OTC FX business continued to see consistent and robust growth. Net revenue grew S$14 million or 36% with average daily volume increasing by the same magnitude to $136 billion.

This was driven by our continued efforts in expanding the client base and enhancing the platform with cutting-edge functionalities. We're also pleased to see that OTC FX EBITDA contribution to the group EBITDA grew to 5% compared to 3% a year ago.

Now, this clearly demonstrates our efforts in improving the operating margin as the business scales. As communicated previously, starting from this financial year, we have implemented net revenue reporting to better reflect the underlying economics of our business, while also aligning with global practice.

Transaction-based expenses i.e., processing and royalty fees have been moved from operating expenses and netted off against operating revenues to derive net revenue as shown on the left-hand side of the slide. In the same manner, processing and royalty fees are netted off from the average fees to derive the average net fee.

The derivative average net fee for the first half of FY 2024 is now $1.31 compared to $1.54 reported previously. In a like-for-like comparison the average net fee this period is now $1.30.

We have also provided additional information in the performance summary on the impact of constant currency. This will help the comparison of financial performance across periods without the impact of currency movements.

Let me now elaborate on the group's net revenue performance across our four operating segments. The growth was attributed to the growth -- to the group's effective execution of the multi-asset strategy amidst macro tailwinds.

Our fixed income currencies and commodities segment grew $19 million or 13% and accounts for 25% of total revenue. I had touched on OTC FX earlier.

For the exchange traded currency segment, we remain as Asia's largest currency futures exchange and several record volumes were set amongst our key contracts. For the Commodities segment, apart from the growth in iron ore products, several pioneering contracts also demonstrated growth momentum.

So overall the FICC segment revenue remains on track to grow at a low to mid-teens percentage over the medium-term. The cash equities revenue growth was driven by the higher SDAV mentioned earlier and higher average clearing fees.

This segment contributes 30% to our total revenue. Equity derivatives revenue increased by $32 million or 22% driven mainly by the volume increase in our flagship FTSE China A50 and GIFT Nifty future contracts.

This segment accounts for 27% of total revenue. Finally, platform and others revenue increased by $2 million or 2% primarily due to higher colocation sales and repricing of connectivity services partially offset by lower indices revenue.

This segment now accounts for 18% of total revenue. Moving on to expenses.

Now we have maintained cost discipline and our adjusted expenses remain comparable. Staff costs increased by $9 million or 6% primarily due to higher variable bonus provision in line with higher profits.

Technology expenses remained comparable, depreciation and amortization decreased by $4 million primarily due to lower depreciation of technology assets. Other expenses decreased by $4 million with lower impairment of trade receivables and lower spending on marketing and traveling.

Now we expect the full year expenses to be at the lower end of our 2% to 4% increase guidance for FY 2025. On capital expenditure, we incurred $22 million in the first half FY 2025 and expect our full year CapEx to be at the lower end of our $70 million to $75 million guidance.

Now to reiterate what we have communicated previously. Our CapEx will be on an uptrend as we modernize the trading and clearing platforms and data centers.

We anticipate overall CapEx to remain below the historical average of 7% of group revenue over a cycle. This slide shows the reconciliation between our reported and adjusted earnings.

The difference is due to non-cash adjustments and one-off items which I will further elaborate upon. First is a net fair value gain of $19 million, mainly from our investment in the private equity fund managed by 7RIDGE, which holds the company trading technologies.

Reflecting its strong operating performance, our investment was revalued upwards by $8 million. Second, we took $2 million impairment due to the lower than expected performance of an associated company.

Now, the fair value adjustments and impairment flow through to our P&L due to the accounting classification given their non-cash nature. These are removed here for the purposes of adjusted earnings.

Third, we recognized a one-off gain of $8 million on the sale of our financial investment in the Philippines dealing system. Finally, we have a further adjustment of $5 million mainly from the amortization of purchased intangible assets.

Our balance sheet remains robust. Moody's reaffirmed our AA2 rating in November 2024 and this remains the highest credit rating it has assigned to any exchange group.

Gross debt increased by about $7 million mainly due to the longer term lease as we renewed our office space and data centers in early 2024. This was partially offset by the reduced borrowings during our refinancing in March 2024.

Our leverage ratios remain at a healthy level. Despite an increase in gross debt, the gross debt-to-EBITDA ratio our leverage ratio declined from one to 0.9 times due to our improved margins.

Our interest coverage ratio decreased to 56 times from 113 times, mainly due to the higher interest expense when we refinance our euro zero coupon convertible bonds with Sing dollar coupon bearing notes. The Board of Directors has declared an interim quarterly dividend of $0.09 per share bringing the total dividends in the first half FY 2025 to $0.18 per share.

This represents an increase of almost 6%, which continues to be in line with our aim to increase dividend per share by mid-single digit percentage of CAGR in the medium-term subject to earnings growth. With that, let me now hand over to Boon Chye, our CEO who will deliver the business update.

Thank you.

Good morning, everyone. Thank you for joining us this morning.

As Daniel said, we performed strongly across the board in the first half of this year. The breadth and depth of our multi-asset offering together with our efforts to broaden our products and customer base position us well to capture market opportunities in 2024.

Financial markets were volatile due to macroeconomic and geopolitical events including a record number of elections around the world and stimulus measures in China. Amidst the volatility, our clients turn to SGX to manage risk effectively and efficiently round the clock.

Across our derivatives suite, we see customers trading more products and higher activity in our overnight T+1 session. Let me now update on our key business segments starting with FX.

We are pleased that in the first half of FY 2025, our FX franchise achieved a record average daily volume of over US$154 billion across OTC FX and listed FX futures. We successfully grew our OTC FX volumes on the back of higher adoption as we enhance our platform functionalities.

First half revenue for OTC FX is now at $55 million and is on group EBITDA in the medium term. In listed FX, our first half daily average volumes rose 40% year-on-year led by our CNH and INR contracts.

We also see traction in our Korean won contract whose volume has increased nearly four times from two years ago. Besides multiple all-time high volumes for our flagship products, we achieved a significant 75% increase in open interest to US$23.4 billion in notional terms.

Notably, there is rising interest in our FX futures coming from new market participants such as buy-side firms, asset managers, hedge funds and commodity trade advisers looking to hedge their currency risk. A sizable 35% of our FX futures DAV are now traded during US and European hours.

All in, we are optimistic that we can build on our successes as we enlarge and integrate our FX marketplace. Moving on to commodities, we continue to be the leading international exchange for bulk commodity derivatives, led by our flagship iron ore contract.

Our efforts to expand the ecosystem and increase financial participation in iron ore are paying off. First, the proportion of screen trading of iron ore futures has increased 2.6 times in the past three years from 28% to 73%.

Financial participants accounted for more than half of our volumes in the first half. Second, volumes coming in during our T+1 session are now over 20% compared to 15% three years ago.

This all points to the significant role of iron ore for our global portfolio risk management and diversification. We achieved a key milestone in our journey to promote iron ore index, index investing and iron ore as portfolio diversifier.

Since January this year, our iron ore contracts are included in the Dow Jones Commodity Index. This follows earlier inclusion in other commodity indices in 2018 and 2022, which reflects the relevance of iron ore in a global portfolio.

In equity derivatives, we had a strong half with daily average volumes, reaching 728,000 lots on the back of robust volumes in our A50 and GIFT Nifty contracts. T+1 DAV has grown to 15%.

Our derivatives ecosystem supported the rise in global usage of our A50 contract amidst market uncertainty. Our active engagement with clients has led to a more diversified client base.

We are confident that more clients will make SGX their venue of choice for investing and risk management, given the liquidity and quality of our products. Moving on to our cash equity markets.

The Straits Times Index broke multiple records and was one of the best-performing indices in the region. This showed in the growth of our SDAV to $1.26 billion in the first half of FY '25.

We aim to build on this momentum as we introduce more trading products, as well as enhancing our retail outreach in the region. In the first half, we launched the Lion-China Merchants Emerging Asia Select Index ETF depository receipts on Hong Kong listed stocks and daily leverage certificates on the magnificent seven stocks in the US This widened investment options for investors and enable them to diversify their portfolio.

We also onboarded more brokers to enable regional access to SGX products. In summary, we will deepen and drive greater adoption of our multi-asset offering alongside the evolving needs of investors.

We also observed improvements in our IPO pipeline. To further strengthen our ecosystem, we will foster deeper relationships with our customers and help them to better capture cross-asset opportunities.

There is a lot more room for us to expand our customer base across segments and globally. While there could be some moderation of macro tailwinds in the near-term, we remain optimistic about our medium-term outlook.

Our focus on broadening our customer base globally and across segments as well as expanding and driving greater adoption of our products and solutions sets the stage for market leadership and remain – and we remain optimistic of achieving our revenue target excluding treasury income of 6% to 8% growth in the medium-term. With that I end my presentation, and we'll take questions together with my colleagues.

Thank you.

Yes we can take the first question.

Hi, good morning. I'm Jovi [ph] from Singapore.

So a few questions here. I think December saw the fourth consecutive month of net buying S-REITs.

Data for January isn't out yet but do you think this will continue in the current quarter? And could you even expand into other equities as well?

And my second question with REITs expected to remain high. What is the outlook for securities trading volume?

And should we expect also a strong second half? And my last question I think on cash equity, Boon Chye you mentioned, increasing retail outreach in the region.

So maybe apart from the SDRs could you just provide more color on what these average efforts are like. Thanks.

Can you clarify your first question? I missed a bit of that.

Yes. So I think just looking at the data for the monthly data for December, you said there was the fourth consecutive month of net buying for S-REITs.

So do you see this expanding to other equities? And yes for this quarter.

Yes. Thank you for the question.

We're pleased certainly with the increased activity on the stock market as I said STI broke multiple levels of – levels records in the first half of 2024 for 2025 financial year. Interest rates obviously had diverging movements.

But we did see increased participation not just in the banking stock but I think across the REITs and the STI index stocks. We are built on this momentum.

There will be more product launches whether that's the SDR, DLC leveraged ETFs. We're also looking to continue to onboard retail brokers outreach to institutions, research and education.

So I think it's important for us to continue to focus on building what we have achieved so far.

Maybe Boon Chye, if I can. Jovi, so when it comes to regional retail just to unpack some of your questions.

Okay, let's start with REITs. Do we foresee further inflows?

It's driven very much by expectations of improvement in some of the underlying markets that our REITs represent for instance in the US. It's not universally true that all REITs are recovering but of course also the interest rate environment.

And it was pretty interesting that there was rotation from retail largely into REITs into small and mid-caps, whereas the institutional started buying. So that was a lot of the impetus for driving the price momentum and the volume momentum.

We're also seeing a broadening of interest regionally. And directly I think you're all aware of the efforts we're making in SDRs.

It's not just a product initiative because every time we do this. We also work with a partner broker or a partner exchange on the other side.

The other ways we go regional, we go directly to work with brokers onshore to make sure so that we promote access into our market and in fact we've seen something like a 60% increase in access into Singapore from regional markets, which as you know in the past six months have flatten a bit. The biggest actually regional inflow that we saw in the past six months was through the ETF Connect, where it's one year old the C+ tech ETF that we launched and it's grown from – it's grown from $100 million to $0.5 billion and that's driven very much by Chinese inflow into the ETF that was listed here the Huatai-PineBridge C+ ETF, right.

So it's pretty broad-based driven by the performance of our market the attraction of our market in the past six months. Did you get that?

Yes. Okay.

Thank you.

Yes. Nick.

Let's wait for the microphone.

Okay. Thank you very much for taking the question.

Three questions from me actually. The first is just the comment you've made on clearing funds.

But as of the 15th of January, you've reduced the commitment to the clearing funds. I just wonder if you could talk a little bit about why that's happened and what we should take from that.

Presumably it's a benefit to cash flow going forward, whether it's sustainable. The second question is, I just wonder if you could talk a little bit more about the T+1 trends you're seeing.

I mean it seems to be coming across various derivatives but you're seeing an increase in T+1 volumes. So I just wonder if you could talk about what's driving that and whether you expect that to increase further.

And I guess the same question on the screen trading on the iron ore. And then finally, I just wonder if you've got any updates you can provide us on where we are in terms of the MAS review on the equity market?

Thanks Nick. I'll let my colleague Agnes, our CRO take your first question.

Thanks Nick for the question. Just for the benefit of growth or to clarify this actually on the last results [indiscernible].

The first line of defense is always the margins that you collateralize [indiscernible]. The reason for the forward deduction is if you noticed earlier in the year we had -- last year we had increased turning up activity and that was to recognize certain concentrations in risk that's brought on by members.

And how we go about that is the clearing fund is sized according to the stress testing scenarios that we -- a very conservative stress testing scenarios that we apply to the membership. And as these risks diffuse it is only natural that we should bring it down.

And the $50 million decrease is not just a contribution from us. It is actually a contribution from the members as well, because it's mutualized.

So there's no need --because we adopt a defaulters pay model, there's no need to over commit members and our contribution if you know that your margin collateral is sufficient to manage the risk.

Thank you, Agnes. To your second question on overnight volume T+1 and how to we expect that.

We obviously have invested in our sales coverage globally, including obviously, in Singapore. And as I said, in the last couple of halves, the European and the U.S.

markets where we're also looking to expand. So we've seen success in minimally cross-selling.

And obviously, there's been much of a macro and geopolitical events outside of Asian hours but markets don't sleep. They trade close to 24 hours, in particular, FX.

So we see room to grow. Likewise, we see greater adoption potentially of the ANA contract in terms of further financialization.

We hope the index inclusion will also drive investment products and has space for the iron ore in any global portfolio diversification. I can't give you a percentage of how they will grow.

But I think, at least in terms of the opportunity set, ability to cross-sell engage more clients. That's what our teams will be looking to do.

On the market review group, you may have read a recent speech by our Chairman. I think it's important that for the Singapore stock market to grow and sustain its trajectory, all structural issues, policy issues, has to be holistically addressed, including by SGX all participants in the ecosystem policymakers and regulators.

I think the ecosystem is very heartened that the review group is taking a very holistic view diving into the issues holistically addressing -- looking to address demand supply on the regulatory front. The review group is still ongoing, so I can't provide you with any update at this point.

Thank you.

Jenny Jaren Heng [ph] from Bloomberg. Congrats on the numbers.

I have two questions just to follow up a bit on mix question. Can you share a bit of color on IPO pipeline, and how the supply is going?

And my second question, what can you tell us about succession planning for the CEO role?

Well, I hope I can do better. The second question is not about the CEO it's about the team.

We have bench strength not just my colleagues on stage or my colleagues. So it's a strong team.

It's a team effort. When the time comes the Board will make the decision.

But as of now, I think the team is driving and gelling well and we hope to continue to improve on our results. On the IPO pipeline as I said, we observe improved momentum.

There are deals that are being worked on, by advisers, by banks, together with the issuers. We hope there will be market window -- market opportunity for these deals these transactions to be printed.

And also, you say that there are many -- can you just at least quantify will it be higher than last year which the threshold is that high on IPOs?

Shall I take that one? That's an easy question to answer.

We certainly hope it will be higher than last year. And part of that is because of what Boon Chye said, right, we see issuers and the professionals becoming more active.

That is heartening. That is usually a good sign and to an extent that we have seen that level of improvement in recent years.

The other thing equally important is just the general market environment for listings because that environment hasn't been difficult just here in Singapore. It has been difficult everywhere else in the world as well.

Equity levels are generally quite high. Rates outlook is stable and in some cases have been declining.

So investor confidence is clearly coming back. And at the same time private capital providers have now a real need and an increasing need for recirculation of that capital creating liquidity for their own LPs.

And so we really expect that the IPO market generally in the world is coming back and we will benefit from that as well.

We're working well as a team. Any other questions?

Yeah. Hi.

Harsh Modi from JPMorgan. A few questions.

First, I just wanted to double-click on the IPO pipeline. Are these exclusive IPOs to Singapore?

Or are these guys looking at Hong Kong, New York, Bursa? And then, what I'm trying to understand is how likely that, if let's say, market, because market is buoyant, right?

SGX is the best performing market and so on and so forth. So what is stopping from these guys from actually making that call to jump in?

And is it just exclusive to SGX, or are they looking at multiple options?

So, I guess, it depends on which phase they are for the group of issuers who've already put in their documentation with Reco that they clearly chosen to list there. Then there's people that are doing the work.

They have hired advisers in Singapore. They have hired Singapore council and Singapore advisers.

So we think that is a very good sign that they're really dedicated to work towards a listing in this market. And that's to be honest the bulk of the group that we -- that's what we consider our pipeline.

We don't consider our pipeline companies that are just thinking about listing in the next three to five years. That is I would say, the shadow pipeline and the shadow pipeline is building up as well.

One thing that, we have seen in the last couple of years is that certainly the companies that we consider to be in our sweet spot, if we've talked about this before the company starting with market caps from $200 million, $300 million up to $3 billion to $5 billion are increasingly convinced that at least a listing in Asia and this part of the world is the right thing for them to do.

And any commonality in terms of sectors? Is it more new economy, old economy or anything other than market cap, which you sense a trend?

Pretty broad-based, and that's exciting. It's across sectors, more new economy than what we have seen.

Again, that's probably also a low bar, but there's a very healthy group of new economy companies. That's also a reflection of just generally the type of companies that are now finally coming through in the region here.

A number of the REITs are starting to look at the market, and that's, frankly, good quality issuance for us as well, sizable as well. And then a whole range in between in the consumer segment, some in the health care space, and these tend to be sectors that do well in this market as well and have a proven track record.

Great. Thanks.

The other question is a bit broader, so for you, Boon Chye. There's a high degree of confidence, as you said, on the medium-term 6% to 8% revenue growth and fantastic numbers of 15% year-on-year growth in half-on-half.

If there is a high degree of comfort on delivering even medium-term 6% to 8%, is there still a need to retain capital for inorganic? Because if I remember, at end of FY 2019, that entire move from whatever, 80%, $0.20 happened because the exchange wanted to retain capital for inorganic growth.

Over the last five years, you have done phenomenally well in terms of organically building capabilities. So does that strategy still make sense?

And is there some possibility that during the full year results on FY 2025, once you have the task force recommendations also out by then, there can be a holistic review on what kind of capital do you need to retain? Or do we start expecting maybe a stretch target, 10% to 15% CAGR over the next five years rather than 6% to 8%?

We guided the subject to earnings growth, a mid single-digit of CAGR growth in our dividend. That was about seven months ago at the start of our financial year 2025.

over medium term, we're six months into it. We continuously evaluate our capital needs, what's the best way to deploy or return them.

We're just six months into the journey. We obviously, on top of that guided ex treasury income revenue growth, 6% to 8% I think increasingly, our investors are also looking at us as growth.

I wish more will look at it that way. So I think we should look at as a combination of dividend and share price change in terms of total shareholder return.

But to your point, we will evaluate what is needed. And I think we have done well equally organically growing and having some bolt-on acquisition.

And the main aim is really to continue to grow the business, grow the company, serves the ecosystem well.

Right. And you have a max leverage target.

Is there a minimum leverage target that you won't go below that level?

Well, I think you have seen us taking on leverage and growing our business. So I'm not sure 0 leverage is also a good boundary.

No, no, I agree. 0 leverage is not the boundary, but is there because we have been -- leverage has been coming down.

So is there a number below which you would say, okay, you would start considering much higher payout because you're just accumulating too much capital. So is there a lower bound on leverage as well?

It will be a combination of expectation of interest rates, what's the best use of our cash and the balance of that, obviously, then we'll look at how we can maybe have a higher payout and what are the needs of the capital. What's the best use of the capital, it will be a function of where we think interest rates may be because sometimes as we had a 0 coupon, 0 convertible.

And now we obviously have a higher rate environment.

Right. And the final question from me Boon Chye.

If you think about next, let's say, 12 to 18 months, and again, you have said it in the past, but what are the refreshed thoughts on if you had to look at inorganic opportunities. What kind of broad businesses or like geography that you would be looking at?

Thank you.

First and foremost, our focus is on the organic growth. But as I said, if there are opportunities that can complement our businesses we'll look at that.

If that comes through if I just scan around most will be outside of Asia. Let's take one or two questions online.

Yes. So there's a question from Betty of CLSA.

Could you elaborate more of our upcoming product plans in the derivative suite and the drivers for the strong OTC FX growth?

We'll take the second one first. Clearly, FX has been moving.

What's pretty interesting that you don't see in the breakdown there is that for the last maybe four to six quarters, a lot of the growth was driven by interest rate management using our platform, because we offer spot FX, as you know, but we also offer FX swaps, right? So, in the past half year that growth was actually driven much more by growth in actual FX management.

And this is for logical reasons because heading into the China stimulus and to the election, there were big moves in expectations of the dollar, and there were big policy changes for instance in rupee. It had been stable for a long time and then it started moving.

This is very promising to us, because when we look at our FX franchise the OTC FX franchise, which covers the buy side and the sell side. That combined mix of needs to manage not just spot FX in Asia, but also interest rates through FX swaps, gives us a great deal of confidence that that growth can continue.

In terms of the derivatives franchise, I think, there is no lack of interesting things we can invest. What we do try to do very intentionally is listen to what the near-term and medium-term emerging needs of some of our customer base internationally are.

So, there are categories of product that we hope to talk more about perhaps at the next briefing where we have spent quite some time engineering something, which works very well in our existing infrastructure. But also I think would constitute a new category of offering towards financialization.

Very importantly what we try to do and iron ore is a great example, which is now that we've got a high degree of financialization, we also build around the clearing house. So what do I mean by this?

Because we've started being included in some investment indices, and we continue to work on the big indices BCOM, GSCI. We've also started creating a concept known as trade at reference, because if you're an investor or you're an overnight trader, you want an exposure, but you don't really want to stay up all night doing the clicking.

So what you'll see is I'll send you an order, that says, buy me 100 tonnes or something like that whatever the relevant reference is tomorrow. And they believe that our reference is fair, because the market is liquid.

So we'll build it. This is called trade at settlement.

So we rolled this out a couple of weeks ago. The adoption is strong.

This goes hand-in-hand with indexation. In the equities world, you call it market on close or market on open.

So trade at settlement is a very important part of our further financialization of iron ore. This is particularly true of iron ore versus any other commodity, because iron ore is backwardated, meaning, if I buy one year forward iron ore, it gives me positive returns just by rolling up the curve.

This is not true of any other commodity. They all tend to be contango.

All these things together make us feel that actually we're very early in this journey of getting our derivatives engine creating new features for further financialization. Other things we do around the engine is also we've published more reports.

So, I don't think you guys track so closely, but we started publishing something called the aggregated exposure report. In the U.S., they call this a commitment of traders.

But what's very, very important to our customers in the West particularly institutional asset managers managed money is they track these reports very, very closely to understand who is managed money, what are their positions, who are physical, what are their position? So, there's a huge body of work that we're doing around the clearing house and the trading engine to make each product have more intense stickiness with the end customer.

One more question from Group REIT GS [ph]. What's the outlook for the half-on-half growth in iron ore DAV?

Well, I think if you look at our overall commodities platform in particular iron ore and freight, we speak about capital efficiency many times. So the cross-margining between the iron ore and freight, and we continue to see a healthy growth momentum overall in the iron ore no doubt there has been a less volatile market in the first half of 2025.

But with greater cross-sell in particularly out of the West and also the continued financialization interest from participants, I think we are on a trend basis to see continued growth. Someone here?

Yeah. Jayden?

Hey. Good morning.

Jayden from Macquarie. Thanks for taking my questions.

Just wondering on the FICC, the revenues that reported, I think a lot of the commentary is very bullish for what's happening in the FICC products. But if we look half-on-half the revenues were steady.

And the growth rate was a little bit below what we saw for the equity derivatives line. So just wondering if there was anything that was going on with fees or something else that was potentially impacting that?

And just secondly on the cost I think the cost performance was great and you've obviously lowered it to the lower-end of the guidance, anything that you were expecting to spend on that you haven't and any reason why that's changed? Those are my questions.

Thank you.

No. I don't think you should read too much.

It is the mix of the OTC FX that's a platform business versus the organic business and clearly the organic business in EQD and EQC. Every dollar that we make drops much more to the bottom-line, because it's baked into the core infrastructure, a little less true on platforms.

But we saw no signs of weakness. I mean even interest rates believe it or not Japanese interest rates right second hike we're now 20% of the market in short-term interest rate futures.

And that's a category we haven't even started talking about. What is the future for interest rate derivatives in Asia?

So that's something we're starting to build up. And even this week we're 30% market share of yen interest rates.

So there's a long way to go in the whole construct of FICC as applies to Asia.

Maybe I can add to that. From a treasury income perspective from a year-on-year perspective we were comparable, but if we look at the mix, it was more skewed towards the equity derivative segment.

So from an FICC perspective treasury income did drop a little bit. And that's why I think you see the numbers from a half-and-half perspective a little bit less stellar.

Because of the -- in the non-OTC FX we obviously have margins in the other businesses. So that's the treasury income split.

On your question on the expenses Dan, can complement, but we did have lower head count in the first half. These are big replace and they will come on board.

And I think in our second half financial year typically the seasonality of marketing and travel has picked up. So those may be the two components in the second half of the year.

Okay. Great.

Thank you.

Any other question here -- maybe one more online.

There's no more questions online Boon Chye.

Any other last question here? Okay.

With that, thank you very much. Thanks for joining us this morning.