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- Record commodities and FX activity drives September, third-quarter volume gains
- Singapore’s largest equity ETF launched, focused on climate action
Singapore Exchange (SGX Group) today released its market statistics for September 2023. Major global equity markets faced downward selling pressures during the month amid a risk-off mood on the back of central bank meetings. Widening rate differentials, coupled with surging oil prices, drove derivative trading activity in foreign exchange (FX) and commodities, as global institutional investors leaned on SGX Group’s multi-asset offering to manage portfolio risk.
Derivatives daily average volume (DAV) rose 3% in September on both a year-on-year (y-o-y) and month-on-month (m-o-m) basis to 1.1 million contracts. For the July-to-September period, total derivatives traded volume increased 4% to 65.6 million contracts, compared with the same quarter a year ago. The average fee per contract for equity, currency and commodity derivatives for July-to-September 2023 was S$1.53.
More commodities records
Commodity derivatives traded volume climbed 77% y-o-y in September to 5.4 million contracts – a record high – with gains across the product suite including iron ore and freight derivatives, petrochemicals as well as rubber futures. For the July-to-September period, total volume was up 47% at 14.7 million contracts, compared with the same quarter a year ago.
Benchmark iron ore derivatives volume jumped 85% y-o-y in September amid record open interest in both futures and options, as China’s stimulus measures and expanding steel production boosted hedging. Screen trading contributed to almost 60% of total futures activity during the month, extending a trend of growing adoption from financial participants, even as Negotiated Large Trade (NLT) volume rose 21% y-o-y.
Forward freight agreement (FFA) volume increased 15% y-o-y. The unique SGX Commodities offering enables institutional investors to risk-manage both cargo and freight on a single liquid and capital-efficient platform.
The volume of SGX SICOM rubber futures, the global pricing bellwether for natural rubber, climbed 37% y-o-y in September to 262,199 contracts, another record high. Elevated volatility in physical rubber prices, alongside a rally in substitute synthetic-rubber prices, spurred hedging demand.
Trusted FX risk management
On SGX FX, total FX futures traded volume gained 20% y-o-y in September to 4.1 million contracts as concerns of prolonged higher U.S. interest rates drove trading activity. For the July-to-September period, total volume rose 36% to 11.7 million contracts, compared with the same quarter a year ago.
Market participants continued to rely on the SGX USD/CNH Futures contract – the world’s most widely traded international renminbi futures – for trusted and efficient price discovery and risk management. Volume surged 77% y-o-y in September to 2.8 million contracts, with a record notional average daily volume of almost US$15 billion.
On SGX Equity Derivatives, robust demand for quality India access spurred trading activity in GIFT Nifty 50 Index Futures. DAV was up 9% m-o-m in September at 85,000 lots or a notional US$3 billion, with month-end open interest at 215,000 contracts or US$8.4 billion.
On the back of the Japanese government’s push to accelerate the adoption of sustainable finance among asset managers and owners, SGX FTSE Blossom Japan Index Futures continued to attract global institutions, with month-end open interest at a record US$116 million.
Singapore’s largest equity ETF
SGX Securities listed the iShares MSCI Asia ex-Japan Climate Action ETF in September. It was the largest equity exchange-traded fund (ETF) in Singapore, with assets under management of US$426 million at launch. The ETF tracks the MSCI AC Asia ex Japan Climate Action Index, which is part of the suite of MSCI Climate Action Indexes introduced in end-2022.
As major global stock markets fell during the month, Singapore’s securities daily average value (SDAV) declined 19% m-o-m in September to S$867 million, while securities market turnover value was down 26% m-o-m. The benchmark Straits Times Index (STI) dropped 0.5% m-o-m to 3,217.41.
For the July-to-September period, total securities market turnover value declined 8% y-o-y. The market turnover value of structured warrants and daily leverage certificates (DLC) increased 4% to S$1.9 billion, compared with the same quarter a year ago. The average securities clearing fee for July-to-September 2023 was 2.49 basis points.
During the month, TSH Resources Berhad (TSH Group) marked its secondary listing on Mainboard. The company, which is primary listed on Bursa Malaysia, is principally engaged in oil-palm cultivation and processing of fresh fruit bunches into crude palm oil and palm kernel.
On SGX Fixed Income, the amount issued from 39 new bond listings climbed 28% m-o-m in September to S$22.2 billion. Highlights included a US$2.5 billion equivalent four-tranche USD/EUR bond offering by The Export-Import Bank of Korea, US$1.5 billion three-tranche senior notes offering by Sumitomo Mitsui Trust Bank Ltd., US$930 million step-up callable subordinated notes by Nippon Life Insurance Co., and Bayfront Infrastructure’s four classes of infrastructure asset-backed securities totalling US$371.7 million.
The full market statistics report can be found here.
