Right. Good morning, ladies and gentlemen, and to also those who are watching this session via webcast. Thank you for joining us today to discuss SGX FY 2024 financial results. The session today will begin with a presentation of our financial highlights by Ng Yao Loong, our CFO, followed by a business update by Loh Boon Chye, our CEO. There will also be time for questions and answers thereafter. Please be reminded, for those of you who are asking questions, do identify yourself. It is now my pleasure to invite Yao Loong on stage to deliver our financial highlights. Yao Loong?
Well, a very good morning, and thank you for joining us on the eve of National Day. So FY 2024 performance, I would say it was stable in both revenue and earnings growth. So group revenue was up 3.1% to about SGD 1.23 billion, driven by the strong growth of currencies and commodities. On an adjusted basis, our expenses increased 2.5% to SGD 604 million, while group earnings increased 4.5% to SGD 526 million. Our operating profit margins and earnings margins improved 0.3 percentage points and 0.6 percentage points, respectively. Now, let me run through the details of our financial performance. So as mentioned earlier, revenue growth was mainly driven by currencies and commodities, which collectively grew 23% year-on-year.
Our derivatives franchise, which is the chart on the left, comprising equities, commodities, and currencies, futures and options, and the associated treasury income, or TI, is about 45% of total revenue. So the revenue from our derivatives suite grew about SGD 12 million or 2%, driven by 8% growth in volumes. Lower revenue growth is in part due to how we account for the GIFT Connect fee arrangement. A royalty used to be paid in FY 2023, and it was accounted for as an expense item. Subsequently, we replaced it with a fee arrangement, which is netted off against the trading and clearing revenue. TI, or treasury income, was marginally lower against a year ago. If we exclude that, our group revenue growth would have been slightly higher at 3.6%.
Now, contributing to the higher derivatives growth was clearly the growth in our trading and clearing revenue. So we saw currency futures, DAV grew 35%. Commodities, DAV also increased by 50%, given our efforts in broadening participation in our iron ore contracts. Equity derivatives declined in terms of DAV, 7%, mainly due to the lower Nifty volumes as we migrated our members and clients to the GIFT Connect. If we exclude the Nifty volumes, the DAV decline would have been 3%. Now, OTC FX business, we saw healthy growth. ADV increased 47% to $111 billion, which exceeded our target of $100 billion early. The ADV increase was from higher swaps activities. We saw financial institutions managing their interest rate risks, enhancing their capital efficient, given the volatility in the markets. Now, revenue-wise, OTC FX grew 22%.
It's now about SGD 92 million. It's at 7.5% to our group revenue, compared to 6.3% a year ago. Capital raising, cash equity markets, activity-wise, remains subdued as economics and uncertainty impacted investors' appetite for new investments. The SDAV declined 4% to SGD 1.06 billion on a year-on-year basis. Now, just a reconciliation between our reported earnings, which is almost SGD 600 million, to our adjusted earnings, SGD 526 million. What you'll see in the middle is a bunch of non-cash adjustments, which I will highlight or elaborate. So first, on the left, we saw a net fair value gain of just over SGD 100 million, mainly from our investment in a private equity fund managed by 7RIDGE , which hosts one single asset, Trading Technologies.
So reflecting the continued strong operating performance of TT, our investment in this fund was revalued upwards by $92 million this year. Previously, in the previous FY, the investment was revalued upwards by $40 million, and this fair value adjustments flows through our PNL, given its accounting classification. Now, second, the performance of Scientific Beta remains subdued relative to our expectations. Hence, we wrote back the accounting gain in our forward liability, which relates to a put and call option with EDHEC to acquire the 7% stake, which we don't own. We also took an impairment charge of almost $9 million this year, relating to purchased intangible assets in Scientific Beta relating to know-how and customers. Third, there were other impairment losses, including a $10 million impairment for the cessation of operations of our fixed income trading platform, or Bond Pro.
Now, our fixed income focus is on short-term interest rates right now, as we launch the futures to support our customers' demand for more risk management tools in this, area. So we launched the futures linked to SORA, which is the Singapore Overnight Rate Average, and TONA, Tokyo Overnight Average Rate, just recently. Finally, we also set aside SGD 8 million as a provision to fund a SGD 10 million initiative to improve the vibrancy of our securities market. The monies will be channeled to our industry partners for initiatives that can help and improve market vibrancy. This could include areas like growing distribution channels for investor outreach, new services to enhance or engage investors, and support the expansion of our product shelf and regional connectivity. So this money set aside will be over and above our ongoing BAU investments in the securities market.
Now, back to revenue across our four operating segments, which appears on our financial statements. So starting with FICC on the left, it now accounts for 26% of our total revenue, so it's comparable to the revenue contribution from both equity derivatives and equities cash. So I mentioned 2 years ago that we expect this segment to grow in terms of revenue at a mid-teens % range over the medium term. It has, in fact, grown more than 20% per annum in the last three years. So volume growth for all our key asset classes in this segment was very strong. As I mentioned, currency futures DAV was 35% growth, OTC FX was 47%, and iron ore grew 52% in terms of DAV growth. Now, moving on to equity derivatives, revenue decreased by 8%.
It still accounts for about 27% of total group revenue, and the decline in the T&C, or trading and clearing revenue, was driven, as I said, by a decline in the derivatives volume from GIFT Nifty and also our Nikkei futures, partially offset by higher volumes in our Taiwan index futures contract. And again, if we exclude Nifty, our trading and clearing revenues would have increased 0.5%. On a pro forma, like-for-like basis, our average fee for all our derivatives suite declined marginally from SGD 1.56 in FY 2023 to SGD 1.54. Again, this relates to the accounting adjustments I mentioned earlier. And so actually, what you are getting is a like-for-like comparison. As for the cash market, revenue was down 2%, due to a 4% decline in our securities traded volume.
It continues to contribute 27% of our group revenue. But the decline was primarily driven by lower trading activity in the REITs and the small and mid-cap stock segments. Overall, securities average clearing fee remained comparable at 2.49 basis points. Now, platform revenue was up 6%, due to growth across market data, connectivity, Index Edge , and others. This segment is about 20% of our total revenue. So we saw growth from a combination of volume, i.e., onboarding new subscribers of co-lo and market data, and also repricing of these services. Now, I wanted to share a view on a half-on-half basis. Usually, we just look at it from a year-on-year basis. So you can see there's actually strong double-digit percentage momentum in volumes across our major asset classes, and that has sustained in July as well.
We released the monthly statistics today, together with the results. So on the left, derivatives business saw a DAV of 1.17 million contracts in the second half of this financial year. It is actually the half-year's highest half-year DAV since our listing. We saw investors managing their risk exposures to Asia, including China, given the more volatile geopolitical and macro environment. So across derivatives, the DAV growth was in the low- to mid-teens or in the high-teens %. So in the equities, DAV was up 11%, commodities 15%, and the exchange-traded currency futures was up 17%. And then when we look at OTC FX, the ADV grew 23%, and so for second half, it was $123 billion. Cash equities, likewise, as DAV grew 21% to about SGD 1.16 billion.
As I said, in July, we saw continued momentum in these numbers. Now, from FY 2025, we will implement an accounting change. So that doesn't affect what you see in terms of the fundamental or the underlying earnings. And this is how we look, and it's more aligned with how management looks at the underlying economics of our transaction businesses, especially in derivatives. So going forth, transaction-based expenses, or what we classify as processing and royalties, will be moved from the expenses side to be netted off against operating revenue to derive net revenue. I think you can see the pro forma on the left using FY 2024 numbers. This will actually facilitate better comparability with major global derivatives exchanges, as they also adopt a similar accounting practice.
So with this change, the calculation of the securities and derivatives average fee per contract will also change. It will now reference net revenue instead of operating revenue, and naturally, that will be lower. So again, I've given you an example of the FY 2024 numbers. So the average clearing fee is SGD 1.54, and just by virtue of this accounting change, the fee will be at SGD 1.31. But nothing else changes. In fact, every line item still appears where you will see it, and you can form your own conclusion. So again, I emphasize this is how it reflects how we look at the net revenue after the royalties.... On the expenses side, adjusted expenses was up 2.5%. It was lower than what I guided initially. So really increased from higher staff costs.
Again, we have the merit increment, and we also had a bit of an increase in our headcount, around 4%, to support the growth of our OTC FX business. Technology-wise, it was up 3% in terms of expenses from higher system maintenance. Royalties declined 5%, but that's mainly due to the absence of GIFT Nifty royalties. We actually saw higher INR royalties in this segment. The adjusted expenses is about 3% lower than reported expenses because it excludes two items. One, the amortization of purchased intangibles. This is what we have been doing since we introduced this metric. And then the other one, which I've mentioned, the SGD 8 million that we set aside to fund the securities market for our partners.
Now, looking forward, sort of to FY 2025, in the near term, we do expect the expenses to grow 2%-4%. I've just mentioned about the accounting change. So when we look at expenses-wise, this will exclude transaction-based expenses, which is, in part, volume-driven. So I think that's a better reflection of our forecast of our expense base. And we'll manage this expense base by growing headcount at a more measured pace, and of course, improving operational efficiency and realizing savings from the completion of the migration of our OTC FX data center. Going out a little bit longer, over the medium term, I do expect that the organic expense growth to remain in the low- to mid-single-digit % range. As for CapEx, we cut SGD 66 million in FY 2024.
I'm guiding to a range of SGD 70 million-SGD 75 million in FY 2025 as we invest in the modernization of our security system and also infrastructure upgrade. I've mentioned quite a few times that our CapEx would appear to be on an uptrend, given the typical refresh cycle for major systems. We have continued to invest in the modernization of our exchange trading and clearing platforms and also our data center. But we expect CapEx over a cycle to remain below the historical average of 7% of group revenues. Balance sheet remains strong. Healthy leverage ratios, if you look at the charts on the right and left, interest coverage ratio, not an issue.
We, in fact, reduced our gross debt by about $50 million when we refinanced our convertible bond, which matured in March 2024, and we issued a Singapore dollar corporate bond. As a result of the refinancing, we do not have any debt maturing until FY 2027. The board of directors has proposed a final quarterly dividend of SGD 0.09 per share. So if it is approved at our upcoming AGM in October, this would bring the total dividends for FY 2024 to SGD 0.345 per share. So this SGD 0.005 increase in quarterly dividend from SGD 0.085 to SGD 0.09 represents an annualized increase of almost 6%, and this is in line with our stated aim to increase dividends per share by mid-single-digit percentage growth in the medium term, subject to earnings growth.
Now, with that, let me hand over to Boon Chye, our CEO, who will deliver the business update.
Good morning again. Thank you for joining us. As you heard from Yao Loong, overall, the group delivered a set of results that demonstrates the resilience of our business. As you can see from this slide, the two-pie chart, our multi-asset strategy has yielded positive results over the years. The diversified revenue profile of business today is the result of our strategic growth initiatives within the currencies and commodity space, combined with the resilience of our equities business. Back in FY 2016, when we first started building up various asset classes, the equivalent of today's FICC segment contributed a small proportion of our total revenues, as seen in the dark blue segment of the pie chart on the left.
Eight years on, our FICC business has grown to account for about 26% of over SGD 320 million of revenues. Today, FICC equities, cash equities derivatives, collectively made up 80% of our total revenues, and each contribute an almost equal proportion to our business. Our platforms and other businesses, which include revenues from market data, connectivity, Baltic Exchange, Energy Market Company, contributes a robust 20% to group revenue. We remain well-poised for further growth from our multi-asset strategy. Let me now unpack our FICC segment, which has delivered mid-teens % growth in the last three years. In SGX FX, our combination of listed FX futures and OTC FX across the full suite of workflow and matching services solidifies our position as a leading gateway to the global FX market.
Since we embarked on building an integrated FX franchise in FY 2021, our combined OTC and FX futures average daily volumes, or ADV, have increased two times, twofold. This year, we maintained the growth momentum for our currency derivatives, achieving 36% growth in total volumes. Open interest across listed FX futures gained 76% year-on-year, and we retain our position as the leading venue of choice for both international RMB and the Indian rupee futures. In June this year, both our RMB and rupee futures achieved their highest single-day open interest record at almost $22 billion and $7 billion, respectively. We see this momentum continuing through the start of the new financial year. Just this week, on Monday, amid market volatility across global markets, our RMB futures registered a single-day volume record of over $35 billion in notional value, our highest ever.
We have also made inroads in other key Asian currencies, particularly in our Korean won and Thai baht futures, where we saw healthy volume growth. There is an increasing demand from our clients for transparent and liquid tools to effectively manage their Asian currency exposures. In OTC FX, we have set a target of achieving $100 billion ADV by 2025, FY 2025, or earlier. I'm pleased, as you heard from, Yao Loong earlier, to report that we've well surpassed this target in FY 2024, with a 47% growth in ADV to $111 billion. Our SGX commodities franchise continue to grow from strength to strength, as seen from the robust sustained growth over the past three years. Total commodities volume has more than doubled since FY 2021, while year-on-year growth has been a commendable 50%.
In yet another record year for iron ore volumes, we saw wider client adoption across the U.S. and Europe on the back of our efforts to enhance participation during U.S. and European trading hours and provide round-the-clock trading. Iron ore has emerged as a global commodity, given its high correlation with industrial growth and infrastructure development. As iron ore becomes a significant trade and economic indicator, much like oil, our iron ore derivatives will become an important part of the institutional investors' portfolio. Our deliberate efforts to deepen and diversify the ecosystem by including more financial market participants has resulted in an increasing proportion of screen trading for the contract. Today, volumes of our iron ore contracts have reached more than three times that of the underlying physical seaborne market. We saw strong growth, volume growth, in our freight suite, too, which is another key barometer for global trade.
As the world's largest dry bulk FFA marketplace, we will strive to harness the synergies of integrated cargo and freight risk management. The increase in volatility and market risks arising from geopolitics and weather patterns have contributed to freight rates becoming more volatile than ever. This could increase risk management requirements using our freight and iron ore contracts, especially given that iron ore is the most commonly shipped dry bulk cargo worldwide. Beyond our flagship contracts, we have seen healthy volumes across the entire commodity suite. Rubber, rubber derivatives volume were up more than 60% in FY 2024, exceeding the size of the physical market for the first time at 3.5 million lots. This was largely driven by stronger hedging demand from improving market fundamentals, higher participation from financial traders, as well as growing interest from European and U.S. clients.
This marks the third year of our partnership with New Zealand Exchange. Together, we have expanded the ecosystem of physical and financial participants who recognize our dairy product suite as a benchmark for seaborne dairy market globally. FY 2024 dairy derivatives volume were up 31% year-on-year, with a steady annual growth rate of more than 30% for both volume and open interest. Moving on to our other derivatives products, notwithstanding the dip in total equity derivatives volume in FY 2024, SGX is still the main international and efficient venue for accessing key Asian economies. Our Pan-Asian Equity Derivatives Suite provides global investors with a single gateway to access Asian economies. A shift in monetary policies, elections-led volatility, and the global AI semiconductor thematic have been driving investment flow....
The latter led to record single-day volumes for our flagship FTSE Taiwan contracts, and we saw open interest growing 7% to 955,000 contracts. Open interest for our SiMSCI futures also rose to 212,000 contracts, close to a record level last seen in October 2022. With a new global interest rate macro environment, we saw the potential to develop a short-term interest rate product suite. At the end of July, we launched interest rate futures linked to Singapore and Japan's overnight interest rates. This augments our existing share of Singapore and Japanese derivatives, enhancing our multi-asset proposition. The launch of our Tokyo Overnight Average Rate , or TONA futures, has been quite timely, given the tightening of Japan's monetary policy and recent market volatility.
There's been a good initial success in our TONA Futures, as well as an increase in activity in our Mini JGB Futures. On the securities front, we further expanded our Thailand-Singapore DR Linkage with 5 new Singapore DRs. Collectively, we now have 8 DRs with underlying Thai blue-chip companies, which make up more than 40% of the SET benchmark index. Retail interest in the DRs have been growing, with net inflows increasing 5 times since the launch. The pipeline of DRs on the link is robust. Singtel's DR is the latest to list on the Stock Exchange of Thailand in April. We see healthy trading across the DRs listed in Thailand and are seeing further opportunities to grow the pipeline. Besides DR, we've also launched our first actively managed ETF in January this year, offering investors exposure to a diversified portfolio of Japanese companies.
We're continuing enhancing our product suite, such as expanding our Structured Certificates to include other underlying markets. Turning to China, where we have a comprehensive and liquid suite of products. Given our unique position as the nexus between China and ASEAN, along with our multi-asset offering, there are many opportunities for us to capitalize on cross-border fund flows and the internationalization of China's financial market. The revival in interest and growth prospects of China boosted open interest of our flagship FTSE A50 contract through the second half of FY 2024, with open interest hitting an 18-month high of $12 billion in May. Our FTSE H50 contract, which has a higher concentration in higher growth technology stocks, similarly saw volume growth of close to 50%.
Combined, our A50 and H50 contracts offer broad capital-efficient access for investors looking to calibrate their exposures across different sectors. Complementary to our Chinese equity derivatives are RMB futures, which registered a significant increase in volumes and open interest by 50% and 65%, respectively. The ability for our customers to achieve capital efficiency across a comprehensive range of asset classes, including our iron ore and freight offering, is one of SGX's competitive advantages. In the area of cross-market connectivity, our ETF links with the Shenzhen Stock Exchange and Shanghai Stock Exchange are one of the most successful mutual ETF product links between China and other international markets.
To date, we have listed 7 ETFs under the link, with a combined AUM that's grown 9 times to SGD 290 million as at the end of July this year, compared to a year ago. We're exploring opportunities in regional equities or yield-focused products in line with investors' demand and interest. With the growth of the Indian economy in recent years, we are well-positioned to build upon the success of our GIFT Connect. The ability of GIFT Nifty Futures, Indian Single Stock Futures, and Indian Rupee Futures on SGX enhances capital efficiency for clients who want to manage their exposures in India through a single clearing house. Trading of our GIFT Nifty Futures has grown steadily since the start of the full-scale operation in July last year.
I'm pleased to share that open interest in our GIFT Nifty contracts has grown 39% since migration to now about 271,000 contracts, with notional open interest growing 73% to $13 billion. We saw a healthy 16% growth in volumes on a half-on-half basis and are on track to achieve pre-migration volume levels in 2025. We will seek to deepen our collaboration with the National Stock Exchange of India and explore opportunities that will drive mutual success, including the development of new products for GIFT Connect. With rising interest in Indian stocks, our Indian single stock futures suite also achieve new milestones, with notional open interest hitting a record of $1.3 billion in June this year.... will look to facilitate risk management efficiency via our Indian single stock futures and GIFT Nifty futures.
Our Indian rupee futures contract complete the waterfront for India access. Against the backdrop of recent India elections, our rupee futures achieve a doubling of notional open interest. We expect to remain the venue of choice for international rupee futures going forward. Looking ahead, we aim to grow group revenues, excluding treasury income, between 6%-8% CAGR in the medium term, driven mainly by low- to mid-teens % growth in our OTC FX and exchange-traded derivatives businesses. Our revenue CAGR over the last 3 years was slower than our previous guidance of mid- to high single-digit, due to a slower cash equity business, coupled with the underperformance of Scientific Beta. As a multi-asset exchange, we remain committed to our cash equities and indices businesses. The stock market is an important pillar of Singapore's financial ecosystem.
We will work with the review group established by MAS on market and regulatory initiatives that could structurally improve the liquidity of our stock market. The success of our DR linkage with Thailand has laid the groundwork for greater collaboration with other ASEAN exchanges using depository receipts. We have inked MOUs with the Indonesian Stock Exchange and most recently with the Vietnam Exchange. SGX will continue to foster close ties with our regional partners to expand access to regional investment opportunities. We expect our commodities and currency franchises to play an important role in future growth. Leveraging on our market leadership in both iron ore and freight derivatives, we will assess opportunities to offer an integrated solution for clients to manage bulk cargo and freight risk on a single capital-efficient platform. We will further tap on the growth opportunities in our integrated FX franchise.
OTC FX currently contributes about 3% to our group's EBITDA. We aim to grow this to a mid- to high single-digit percentage of group EBITDA in the medium term. Further upside in OTC FX contribution to our bottom line could come from our efforts on scaling client acquisitions in Europe and Asia Pacific, and cross-selling across geographies. At the same time, we'll optimize our expenses by integrating our distribution functions and technology platforms. We look forward to further advancing our position as an international multi-asset exchange. Thank you very much for your attention. With that, I conclude my presentation, and invite my colleagues to join me for the Q&A. Yes, Nick?
Thanks very much. It's Nick Lord from Morgan Stanley. Two questions, actually. The first is just on the MAS-sponsored review of the equity market. And I wonder if you could talk a little bit about, I mean, you've had a lot of experience, obviously, in trying to get the volumes up on the Singapore Stock Exchange, and it's obviously a difficult thing to do. So I just wonder if you could give maybe your initial thoughts on what could be different with a, as you say, a whole ecosystem approach, as opposed to SGX trying to do it on its own. So I'd be interested if the, if there's a silver bullet out there that you can, you can think of.
And then, secondly, if you could just talk a little bit about Trading Technologies, because obviously quite a large part of your NPAT came from the revaluation of Trading Technologies or the surprise, I guess, in the NPAT. So what is it? How are you valuing this? You know, how is that sort of? You said it's an improvement in operating profit, but I'm just interested to know is, what exactly is driving the revaluation? And could you just talk a little bit about what Trading Technologies does? Is it primarily supplying stuff to you, or is it sort of a broader sort of business, and therefore, again, trying to work out sort of the, you know, the basis for the revaluation, if you like?
Yeah. So maybe I'll take the first question, and then let my colleagues elaborate a little bit more on what does Trading Technologies do, and give a sense of the upward revaluation. So look, first, we will not and we can't pre-empt what the review group will do. If you look at the efforts over the last couple of years, there has been obviously creation of pre-IPO fund to invest in IPO companies. There's obviously been efforts to broaden and deepen the research ecosystem, and also our own efforts on regional retail outreach. So many, many initiatives has been done. I think what is important is for the overall ecosystem to come together.
This would not just involve a regulatory review. It will have to look at what makes the stock market more liquid. So I would reckon that this is not just on the supply side. I think demand for stocks on the stock market, and obviously, active, constant price discovery, which would also enhance liquidity. But look, the group has just been formed. SGX will be part of the group and the workstream, and we also welcome feedback as we engage the broader ecosystem as inputs for consideration.
There's a link between, I suppose, the first and second question, and the first question. The reason the ecosystem is involved is because, as exchanges, we're B2B2C businesses. So we need to make sure that the intermediary businesses are sufficiently well-connected and sufficiently well-lubricated, so that we can connect fully to the end customer base, particularly the end institutional customer base. So what does TT do? TT is a pretty old business, couple of decades old. What's happened more recently is that as global users of futures products have become deeper, they're more universal, they've had to work with intermediary software providers to connect to a global network of quite different futures exchanges, Chinese exchanges, Indian exchanges, SGX, as an example. And they typically want comprehensive coverage, and they typically want software which works more as SaaS and possibly less as self-managed service.
So we work with TT primarily, and have done for a long time, as a business partner. So they were literally the first for us to connect GIFT to our end customers. So the connectivity comes in two ways: they have to send data out reliably at high speed, and they have to send orders in, right? So it made a great deal of sense, when the deal came out, and you know, it fell through because Goldman's tried to buy it. Every other bank in the world said, "Well, we can't have one person own this vital, network." So Cboe and SGX, viewed as friendly, accommodative, partners, were asked to, I think, get involved in this fund. So we've done many things directly with TT in the past.
We'll continue to do so, but it's also turned out that their business has expanded massively, and that accounts for their standalone revenue growth.
Any other question here? We'll come to you next. Yeah.
Thanks for the presentation. I'm Jovi from The Edge Singapore . So 3 questions here. My first, could you just provide more color on the SGD 8 million one-time provision towards the securities market initiatives? What are these initiatives, and could they become a recurring expense in the future? Yao Loong mentioned certain partners earlier, and are these initiatives related to the new review group in any way? And, maybe my second question here, on the review group that was announced, there are concerns about the composition of the group and private sector representation. So should brokers and remisers have been a part of the group, in your view? And finally, Yao Loong is transitioning to a new role as co-head of equities. Could you provide more color on this shift?
What does SGX hope to achieve with having two equity heads, and how are tasks divided, and how is the search for the new CFO going? Thanks.
Is that share price sensitive information? I'll let the CEO answer.
But I think first, as I said, it, we have already, we are already incurring a certain level of expenditure or expenses and investments to support our asset classes, including the securities market. So this SGD 8 million to form a SGD 10 million, because we have got a previous sort of provision that we have set aside, forms that SGD 10 million dollars. And it is over and above what we will spend. And for us, clearly, as Mike and Boon Chye talk about, it's an ecosystem. It's not just about us introducing new products. We need the ecosystem, the brokers, the financial advisors, and so on, to be able to go out, talk to the clients, talk to the customers, right? So this is our attempt to say, "Look, this is a broader ecosystem.
Let us work with you to expand the product shelf, the product shelf that we have for distribution, connectivity, and so on." So this is, in a sense, that is one of... And why we have been able to do that is because when we look at our expenses growth this year, we have actually been able to grow at a pretty measured rate. We were 7%-8% last, in the last two FYs, and it has come off. And so we say, "Look, we could, of course, pay shareholders a little bit more, which we have done.
Can we do something for our ecosystem of—with a view towards enhancing the vibrancy of the entire securities market?" And so we have been able to then channel that, additional savings that we have into this, one-off fund to support the broader ecosystem.
Think about this in terms of engaging the ecosystem to try and grow distribution channels, reach out to more participants, new services, expand our product shelf, as Yao Loong has mentioned. I think you have a question around the composition, the representation, of the review group. We at the SGX Group are in constant conversation as part of our engagement, our business development, obviously, with the brokers, with the securities houses. Views and initiatives from them has always been in a constant dialogue engagement. I think the review group will clearly also, I'm sure, have a wider engagement beyond just the composition. We will obviously represent what we hear, what is being suggested to us, to us by the broader ecosystem.
Your third question was? Yao Loong, can you tell.
Yao Loong working harder.
Well, yes, and when we have Yao Loong Ng's replacement in place, he will transition to the equities role. Which clearly work with the existing team, who has done a lot to try and grow the liquidity of our stock market. Over here in the middle. And then after this, we take maybe questions from the participants online. Yeah.
Hi, Timothy Goh from the Straits Times. Just building on what Jovi had asked. So some stock brokers that we have spoken to have expressed disappointment about the new review group, specifically concerns that a 12-month period is too long. What are your thoughts on this? And I guess you also mentioned something about... I guess you mentioned that SGX is constantly engaging with the review group to look at the feedback. Has SGX received any concrete feedback on the review group? If so, are you able to share what they are? The second question is, are you expecting more listings this year as compared to last year? If so, why? Third question: Do you have updates to share on working with Anchor Fund @ 65 , and is there a timeline for the nine companies to list?
Okay, on the first question, we are with or without the review group, with the review group, obviously, is a focal point to to harness and garner views and suggestions. For us, I wouldn't say work have started. Clearly, work have started, but we have been continually engaging the market. But obviously now, there is a visible review group. We, on our part, will clearly harness and engage with them in terms of what other ideas are there to try and improve the liquidity. And on the IPO front, I would say the following: Look, it's been clearly very low base for us in FY 2023, FY 2024.
With the change in macro environment, and what we have seen talking to companies, companies have started preparing for IPO on SGX. We clearly only had more catalysts in the last year, in FY 2024. I would say we're now seeing main board potential listees making preparation, mandates given out to professional, and we hope market stays more favorable, more conducive. But we've seen some of the U.S. numbers in the last 1 week, so all things have to be aligned. But clearly, we've seen more mandates being actually booked up. With 65 Equity Partners , good partnership, constant dialogue. We meet companies, we introduce companies, vice versa, but they are really the investor to those 9 companies working with them.
So there's not much I can glean into to give you a view. Yep, coming to you.
So this question from Harsh Modi, from JP Morgan. It's about our capital expenditure. So with CapEx moving up, likely we'll get higher OpEx in the next couple of years due to depreciation. So how should we look at, you know, OpEx going forward into the medium term?
Okay. Well, I think, Harsh, thanks for that question, right. So that's why we gave a medium-term expense guidance, low to mid-single digit over that period of time. We will have to manage our expense growth, overall, right? So staff costs, as I say, it's almost 50%, then there will be depreciation, there will be the SMR expenses, and so on. So we look at this, in aggregate. Yes, OpEx, sorry, depreciation is likely to increase, as we spend more CapEx, but we just have to maintain that overall, growth within the, overall expense base.
With that, Harsh, if I could add, if you recall, in FY 2022-2023, our expense growth, I think, was in the six-
7 to 8.
Yeah, 7%-8%. And then FY 2024, obviously, it came down as you just saw. And back then, we also guided a mid-
Yeah
... single-digit expense growth. So we're managing through a cycle. You may get some changes year-over-year.
There's a follow-on question from Harsh. This is about our dividends. So how should we think about the extent of DPS increase over the next 12 to 18 months? Is it going to be a gradual increase in absolute DPS, or is there possibility of restoring payout closer to the payout ratio levels of about 80%?
... subject, obviously, to our revenue growth, our net profits growth. As they grow, we aim, as we said before, a mid-single digit CAGR growth in our DPS. So we just increased it by SGD 0.005, and obviously, you can imagine as our impact and revenues growth of a bigger base, and if we achieve that, we can expect a higher absolute dividend per share. Any other question here? Yep.
Thank you. Bad line.
Over here. Yeah.
Thank you. This is Jayden from Macquarie. A couple of questions. So you crossed the FX ADV target earlier, which is great. I think I saw in the slides SGD 123 billion of ADV. What's the new target, and how fast can we get there? I think this is a really interesting growth part of the business. And secondly, just to follow up on the securities market review, how engaged are the sovereign wealth funds? I think that's a key part of the whole sort of Singapore push on this, and I guess, how much do they sort of see this as an important holistic, you know, part of creating value for the country overall? Those are my two questions. Thank you.
Yeah, on the FX, I think, many of you, Jayden included, was asking, rightfully, a couple of years ago, how will FX contribute to, our bottom line on net profits? We have obviously grown the ADV quite substantially. It's important for us to now have that business also contribute to the bottom line. It's 3% of EBITDA in FY 2024. On the medium term, we want this to get up to a mid- to high single digit, so that it flows directly through the bottom line, and ADV growth will be part of that, but I think it's important for the revenue and the net profit contribution. On your second question, it's really more about demand, right?
Yes, there's been a lot of write-up on sovereign wealth funds, but the mandate of the sovereign wealth funds are very clear. But I think what we're trying to look at is not just supply, but how to have demand, very focused demand into the stock market.
Okay. Thank you.
Yep.
Hi, morning. Hi, I'm Andrea from CGSI. I have a question on Treasury Income. 2024 versus 2023, it's been very stable year-over-year. How should we think about Treasury Income going forward in view of the rate cuts ahead? Thanks.
Yeah, so I'll take that. Okay, so that's one thing I learned in my CFO days, that never sort of to provide the forward guidance because I'll inevitably be inaccurate or wrong. So look, I think, again, I think it's hard to provide a forward guidance on this because it's not just a function of the forward curve. We, as a clearinghouse, offer customers the flexibility to use different currencies, different sort of collateral, cash versus non-cash. All this affect the overall treasury income. So it's not just a function of what's the spread between the different, tenors of current account and fixed deposits. So I think in that sense, we prefer to focus again on growing the derivatives business, which then gives us the OI.
That is within, I would say, at least something that we have greater control of, as opposed to all these exogenous factors. We will continue to monitor all those things as part of our business, and we will provide that transparency on both the operating income, with and without treasury income.
I should also point out that not all interest rates are going down. We have a very considerable Japanese franchise in equities, in JGBs, and just launched short-term interest rates. So that's one central bank which has started raising interest rates, and that speaks to the diversification that we have. Likewise, we have a very large pool of RMB. We are the world's largest RMB-based clearinghouse outside of China, right? That the interest rates could go down, they could go up, but it's quite distinct from U.S. or European interest rates.
Thank you for that question. It's a good question, and we get asked all the time. What we're trying to do going forward, which we started now, and you can infer from the results pre, in prior years, to segregate TI and then the operating business. And if our operating business improves, we should get also more collateral. So that's one way to judge a business. But then, obviously, TI could perform differently based on the shape of the curve currency mix. So hopefully that gives you the ability to have a more holistic view of the group's businesses. Any more online questions?
Yes. So there's a question from Gurpreet, from Goldman Sachs. Given that we have just articulated an overall growth target, can we zoom into equity derivatives and how this will grow and, you know, any guidance on its growth levels?
The half-on-half growth, I think, is the strongest indicator of the current trend. Of course, the past week's volume will also tell you something about the need in the market, the latent need in the market. I suppose what was most interesting in this past week, and you could take this lesson forward, is that equity derivatives weren't just one lump.... right? As we see, economic zones de-globalize, it's also become very clear that certain segments of equity derivatives are very idiosyncratic. So Nikkei, we had down 10, down 15, up 10, which is very unusual. Taiwan followed very similarly. India barely did anything, and this is after a year of extremely strong inflows and growth. What that tells you is the kind of leverage carry-driven players in some markets are very distinct from benchmark bogey-driven investors.
Of course, in our A-share and H-share market, they were splendidly untouched by all of this. So the forward look for what we have in equity derivatives is that almost every segment that we have built out for the Pan Asia waterfront, to the extent that we can, I think all that has independent growth drivers, right? Realized volatility has gone up. The amount of risk capital that's put into these markets has gone up. And I think just to focus on the slide that Boon Chye had shown in India, the total amount of FPI that's sort of reported is something like INR 800 billion, and this covers bonds and equities, cash into India by foreign portfolio investors. 2% of that is said to be used for overseas derivatives, P-Notes, ODIs.
Our open interest is the same size as the total ODI, right? SGD 13 billion-SGD 14 billion. SGD 13 billion-SGD 14 billion is really not very much at all. We fully expect that there are some areas where growth will continue. We think the Nikkei franchise will do well, we think the India franchise will do well, and I think there's tremendous upside in terms of trading liquidity and volatility for the China franchise as well.
Yeah. And then, after that, maybe... Are there any more online question? Yeah, then we take two questions, then maybe one more if there's- Yes, go ahead.
Thanks for the opportunity. This is Yong Hong from Citi. A couple of related questions. I think been a while since you talk about M&A, and now you are raising dividends. Should, should we expect, you know, dividends raised instead of every three years to be an annual thing? And a related question is, we know that SGX will obviously explore opportunities when they come, but is there a shift in your strategy to grow? And how have your thinking about M&A changed before and after all the last few acquisitions that you have made? And finally, also based on your derivative product suites, can you talk about whether the volume growth is driven by market share gain, or is it driven by the same market share but a bigger pie? Yeah, these are my questions.
Sorry, the third one again,
The volume growth in your derivative products, is it driven by market share gain?
Market share, okay. On your dividend question, as I said earlier, we are aiming to reward shareholders with a CAGR of mid-single digit over the medium term. That is obviously taking into consideration medium term as best as we can in terms of M&A. And I would say that with or without M&A, we want to try and steer towards the mid-single digit CAGR growth. And as I mentioned earlier, even when our revenue and net profits continue to grow as a percentage, you can expect percentage of the CAGR growth; you can expect a higher absolute dividend per share.
Building on our strength, you've seen the two standout that we have, FX and commodities, together with the platform businesses, in particular, data and market connectivity, that's grown. We'll try and build on that strength, in particular, commodities. Back to the earlier question, in terms of the equity derivatives growth. We had used and leveraged our strength in equity derivatives to cross-sell into FX futures in the last few years, right? And then we obviously boosted that with the OTC FX platform. The reverse of this now is we're also beginning to see FX futures client trading into equity derivatives market. Yes, there will be markets levels that up and down, but that cross-selling client coverage is where we hope to also provide some of the volume and growth.
And in your question around the equity derivatives is really, if I strip out the market levels, I would attribute more of those to a market share gain. We are the preeminent Asian economy, Asian market access platform.
Okay. Maybe just one small follow-up. I think on your, you used to call it the DCI. I think on a year-on-year, it was high single digits or 10%, but on a half-on-half , it was actually quite flat. So, you know, from here on, how should we think about growth for this segment? Yeah.
Yeah. So you're right. So as I said, the market data and connectivity was, I think, close to 9%, and that's driven both by price increase, and so that's why you don't see the half-on-half deviation because of the timing of some of these increases. For the platform business, I think, we will manage it within the overall, revenue guidance of 6%-8%, excluding TI. I think historically, you would have seen that segment growing probably at a mid-single digit percentage. And if we can do a little bit more, I think we will try and see whether we can grow that a little bit faster, and that will come from a combination of things like pricing, reviews, and so on.
Okay, one last question.
Thank you.
No more online questions.
No more.
Similar question as what Yong Hong just asked.
Okay. All right, thank you very much. Thank you for your attendance.