Alpha-Centric ESG Research

Kyle Rudden

<ul>
<li>Absolute value of index-linked assets is the ultimate measure of market share, but it misses an important aspect of the ESG-related indexing market – i.e., relative market share growth.</li>
<li>A category of ESG index providers that leads vis-à-vis relative growth is exchange-owned ESG index providers, a group which currently accounts for US$46.3 billion in indexed assets.</li>
<li>Asian exchange-owned ESG indexers are the clear leaders in that subcategory, with <a href="https://www.smartkarma.com/entities/singapore-exchange-ltd" target="_blank" data-smartkarma-citation="entities:1047:1" rel="noopener">Singapore Exchange (SGX SP)</a> and Korea Exchange leading that cohort with double-digit growth.</li>
</ul>


Absolute value of index-linked assets is the ultimate measure of market share, but it misses an important aspect of the ESG-related indexing market – i.e., relative market share growth.
A category of ESG index providers that leads vis-à-vis relative growth is exchange-owned ESG index providers, a group which currently accounts for US$46.3 billion in indexed assets.
Asian exchange-owned ESG indexers are the clear leaders in that subcategory, with Singapore Exchange (SGX SP) and Korea Exchange leading that cohort with double-digit growth.


Singapore Exchange, Korea Exchange Lead Exchange-Owned ESG Indexer Growth

<ul>
<li>The Monetary Authority of Singapore (MAS) recently launched a public consultation regarding a Code of Conduct for ESG ratings providers and ESG data product providers in Singapore.</li>
<li>It is the right approach for Singapore – a voluntary best-practices framework furthering one of the world's most credible "green" economies, not a regulatory force-fix of something broken.</li>
<li>No surprise ratings methodology changes. No en masse upgrades/downgrades. No acute shocks to the system. Just slow and steady progress for ESG investing and finance in Singapore.</li>
</ul>


The Monetary Authority of Singapore (MAS) recently launched a public consultation regarding a Code of Conduct for ESG ratings providers and ESG data product providers in Singapore.
It is the right approach for Singapore – a voluntary best-practices framework furthering one of the world's most credible "green" economies, not a regulatory force-fix of something broken.
No surprise ratings methodology changes. No en masse upgrades/downgrades. No acute shocks to the system. Just slow and steady progress for ESG investing and finance in Singapore.


Singapore Code of Conduct for ESG Ratings Is Less Risk and More Reward

External broker reports(aggregated public sources), RHB Invest

RHB Invest

External broker reports(aggregated public sources)

RHB Investment Bank is one of the leading capital market players in Malaysia. Supported by an award-winning research team of experienced product specialists, RHB Group Investment Banking offers a full range of investment banking products and services covering primary markets, such as advisory (corporate & debt restructuring, mergers and acquisitions, takeovers), fundraising via both equity and debt instruments, and secondary markets including securities trading for both institutional and retail clients. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>Singapore Exchange (SGX)’s monthly market statistics continued to underwhelm.</li><li>Both securities daily average value (SDAV) and derivatives daily average volume (DDAV) registered y-o-y decline in May 23.</li><li>SGX’s forward P/E is close to its historical average, which is a fair valuation level.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Singapore Exchange (SGX)’s monthly market statistics continued to underwhelm.Both securities daily average value (SDAV) and derivatives daily average volume (DDAV) registered y-o-y decline in May 23.SGX’s forward P/E is close to its historical average, which is a fair valuation level.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Singapore Exchange (SGX) - Monthly Trading Data Continues To Disappoint

<ul><li>Singapore Exchange (SGX)’s April market statistics came in below estimates. Both securities daily average value (SDAV) and derivatives daily average volume (DDAV) registered declines.</li><li>See SGX's announcement dated 12 May 2023. Implied FY23 (Jul 2022 to Jun 2023) SDAV and DDAV (based on data till April) are tracking 2% and 5% below our forecasts.</li><li>Stay NEUTRAL and S$9.80 target price, 5% upside from the current SGX's share price.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Singapore Exchange (SGX)’s April market statistics came in below estimates. Both securities daily average value (SDAV) and derivatives daily average volume (DDAV) registered declines.See SGX's announcement dated 12 May 2023. Implied FY23 (Jul 2022 to Jun 2023) SDAV and DDAV (based on data till April) are tracking 2% and 5% below our forecasts.Stay NEUTRAL and S$9.80 target price, 5% upside from the current SGX's share price.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Singapore Exchange (SGX) - April Trading Data Disappoints

I often note that whilst Asia arrived at the ESG party fashionably late, it is making up for lost time, going from idle to full-throttle often by leapfrogging large patches of middle ground. One apropos example is the recent surge in Chief Sustainability Officer (CSO) hires by Asian companies.Rather than going a typical route – like having someone in Marketing do double-duty for a year or so to delay shelling out big bucks for a proper CSO – companies such as <a href="https://www.smartkarma.com/entities/singapore-exchange-ltd" target="_blank" data-smartkarma-citation="entities:1047:1" rel="noopener">Singapore Exchange (SGX SP)</a> and  <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (0005 HK)</a> have recruited some seriously-qualified, executive-level CSOs.Big news, but I wouldn't have bothered with it a few years ago.Until recently, there wasn't much "Chief" or "Officer" to the CSO role. At best, companies hadn't yet figured out what to do with a CSO. At worst, they handed out CSO titles for optics; "greenwashing," as it were. CSOs were idealistic and motivated. Managements and Boards just didn't get it, yet.CSOs have since been excepted as equals into the "C-Suite," having proven their worth and earning a voice in all levels of strategic discourse. Exceptions do exist, the CSO role is varied and continues to evolve, and that "greenwashing" daemon still rears its ugly head every now and again.On the whole, however, CSOs are more influential than ever.From an ESG investing angle, the existence of a CSO has two specific implications: 1) it serves as a barometer of overall ESG commitment, and 2) it is associated with ESG outperformance, and lower ESG risk. For some issuers, it can even portend (portend, not predict) future ESG performance.Recent CSO activity in Asia inspired me to dig deeper. "Deeper" is relative, as the CSO pool in Asia (and elsewhere for that matter) is still very shallow. Nevertheless, this is a comprehensive analysis of the evolving CSO role in Asia – generally, and by cross-sections and topics such as:<ul>
<li>
Results: Correlative or causal, CSOs are linked to better ESG performance and lower risk.</li>
<li>
Country: Singapore and the Philippines have the most CSOs by company-count and size.  </li>
<li>
Sectors: Asian-company CSOs tend to concentrate in large-cap sectors and/or industries.</li>
<li>
Education: CSOs have more advanced degrees, from top universities, than do non-CSOs.</li>
<li>
Gender: Singapore and Thailand have the most female CSOs; Japan and India the least.</li>
</ul>

I often note that whilst Asia arrived at the ESG party fashionably late, it is making up for lost time, going from idle to full-throttle often by leapfrogging large patches of middle ground. One apropos example is the recent surge in Chief Sustainability Officer (CSO) hires by Asian companies.Rather than going a typical route – like having someone in Marketing do double-duty for a year or so to delay shelling out big bucks for a proper CSO – companies such as Singapore Exchange (SGX SP) and  HSBC Holdings (0005 HK) have recruited some seriously-qualified, executive-level CSOs.Big news, but I wouldn't have bothered with it a few years ago.Until recently, there wasn't much "Chief" or "Officer" to the CSO role. At best, companies hadn't yet figured out what to do with a CSO. At worst, they handed out CSO titles for optics; "greenwashing," as it were. CSOs were idealistic and motivated. Managements and Boards just didn't get it, yet.CSOs have since been excepted as equals into the "C-Suite," having proven their worth and earning a voice in all levels of strategic discourse. Exceptions do exist, the CSO role is varied and continues to evolve, and that "greenwashing" daemon still rears its ugly head every now and again.On the whole, however, CSOs are more influential than ever.From an ESG investing angle, the existence of a CSO has two specific implications: 1) it serves as a barometer of overall ESG commitment, and 2) it is associated with ESG outperformance, and lower ESG risk. For some issuers, it can even portend (portend, not predict) future ESG performance.Recent CSO activity in Asia inspired me to dig deeper. "Deeper" is relative, as the CSO pool in Asia (and elsewhere for that matter) is still very shallow. Nevertheless, this is a comprehensive analysis of the evolving CSO role in Asia – generally, and by cross-sections and topics such as:

Results: Correlative or causal, CSOs are linked to better ESG performance and lower risk.

Country: Singapore and the Philippines have the most CSOs by company-count and size.  

Sectors: Asian-company CSOs tend to concentrate in large-cap sectors and/or industries.

Education: CSOs have more advanced degrees, from top universities, than do non-CSOs.

Gender: Singapore and Thailand have the most female CSOs; Japan and India the least.


The Rise of the Chief Sustainability Officer in Asia

Singapore

Singapore Exchange Limited owns and operates Singapore's Securities and derivatives exchange and their related clearing houses.  The Company also provides ancillary securities processing and information technology services to participants in the financial sector.

52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

SGX (SGX SP)

Singapore Exchange, Korea Exchange Lead Exchange-Owned ESG Indexer Growth

Exchange-owned ESG index providers lead the market in terms of relative growth, Asia exchange lead that group, and SGX and Korea Exchange lead in...

Kyle Rudden

Singapore Code of Conduct for ESG Ratings Is Less Risk and More Reward

Singapore's Code of Conduct for ESG ratings is more light-handed than other regulation-based approaches, but therein lies the "less risk and more...

Kyle Rudden

Singapore Exchange (SGX) - Monthly Trading Data Continues To Disappoint

Singapore Exchange (SGX)’s monthly market statistics continued to underwhelm. Both securities daily average value (SDAV) and derivatives daily...

RHB Invest

Singapore Exchange (SGX) - April Trading Data Disappoints

Singapore Exchange (SGX)’s April market statistics came in below estimates. Both securities daily average value (SDAV) and derivatives daily...

RHB Invest

The Rise of the Chief Sustainability Officer in Asia

Chief Sustainability Officers can impact ESG performance and risk-adjusted returns. CSOs are becoming more common anong Asian companies, which are...

Kyle Rudden

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)