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- Optimism over China’s reopening lifts trading activity across multiple asset classes
- Rebound in retail participation bolsters securities market turnover
Singapore Exchange (SGX Group) today released its market statistics for February 2023. Global institutional investors leaned on SGX Group’s multi-asset offering as China’s reopening drove trading activity, particularly in commodities and foreign exchange (FX).
Total derivatives traded volume rose 7% year-on-year (y-o-y) in February to about 20 million contracts, the highest in three months. Benchmark contracts on SGX Commodities continued to serve as a trusted macro proxy amid signs of China’s economic recovery, with volume gains across bulk commodity cargo and freight. Iron ore derivatives volume increased 53% y-o-y to about 3.1 million contracts, up 24% month-on-month (m-o-m), while forward freight agreements (FFA) volume climbed 13% m-o-m to 193,797 contracts.
The volume of SGX SICOM rubber futures, the world’s pricing bellwether for natural rubber, rose 26% y-o-y and 16% m-o-m to 179,529 contracts.
Strong FX hedging demand
Optimism over China’s outlook also added to FX volatility, spurring hedging on SGX FX, Asia’s leading currencies marketplace. The volume of SGX USD/CNH Futures jumped 85% y-o-y in February to 1.5 million contracts, an outsized gain partly because of fewer trading days in the year-ago period due to the Lunar New Year. The contract is the world’s most widely traded international renminbi futures.
SGX INR/USD Futures volume increased 2% y-o-y to 1.2 million contracts, as the Indian rupee declined towards the second half of February. Total FX futures volume climbed 39% y-o-y to 2.9 million contracts.
Growth in MSCI Singapore equity derivatives
On SGX Equity Derivatives, the SGX FTSE China A50 Index Futures remained the world’s most liquid international futures for Chinese equities as market share by open interest grew further in February. Traded volume of the contract rose 5% y-o-y to 7.5 million contracts, up 1% m-o-m.
SGX MSCI Singapore Index Futures volume gained 7% y-o-y to 1.2 million contracts, or 4% m-o-m, on the back of factors including positive earnings from local banks. Trading interest in the SGX MSCI Singapore contract continued to expand beyond Asia, with T+1 overnight volumes accounting for 10% of the February total, a six-month high.
On a m-o-m basis, total equity futures volume was little changed at 13.1 million contracts, with SGX FTSE Taiwan Index Futures volume up 8% m-o-m at 1.3 million contracts.
Securities retail turnover rebounds
In Singapore, the Straits Times Index (STI) fell 3.1% in February to 3,262.63 amid concerns that further interest-rate hikes aimed at stemming inflation would slow growth. Year-to-date, the benchmark continued to outperform regional peers.
Securities market turnover value on SGX Securities stood at S$22.1 billion, while securities daily average value (SDAV) declined 5% m-o-m to S$1.1 billion. Retail turnover rebounded, up 10% m-o-m, with more than S$811 million in net inflows across all stock segments, led by STI constituents.
The market turnover value of structured warrants and daily leveraged certificates (DLC) increased 58% m-o-m in February amid steady institutional trades. There were 33 new listings of structured warrants and DLCs, up 43% m-o-m. During the month, SGX Securities welcomed YKGI Limited, an established homegrown food-and-beverage (F&B) operator, to Catalist.
On SGX Fixed Income, Asia’s leading international bond marketplace, the amount issued from 149 new bond listings – the most since July 2022 – climbed to S$34.1 billion in February. Highlights included Korea Development Bank’s US$2 billion dual-tranche notes offering, Temasek’s EUR1.5 billion dual-tranche notes offering and Korea Housing Finance Corporation’s US$1.3 billion dual-tranche social bonds.
The full market statistics report can be found here.
