The 27^th of May 2020 might go down in SGX’s history as its version of independence. At the very least, it was a watershed event, with MSCI ending its 23-year-long partnership with SGX. The ensuing stock price decline and series of sell-side analyst downgrades signalled the significantly negative impact this termination has on SGX’s business. Nevertheless, in this article I will argue that the future of SGX is not as bleak as what the market expects. My two main arguments are: 1) SGX is starting from a position of strength, and 2) SGX has, in earnest, already been pursuing a diversified growth strategy that will mitigate the impact from the termination of this licensing agreement.

Tailwinds and strength

First, SGX is starting from a position of strength. This is supported by strong industry tailwinds and SGX’s strong financial position. Strong industry tailwinds will help SGX maintain its relevance in the financial eco-system. With the right...