- Cash equity activity accelerates on portfolio rebalancing, buoyant US market
- Equity index futures volumes moderate as Asian cash market volatility normalises
- China economic reopening dominates; iron ore derivatives trading keeps up-trend
Singapore Exchange (SGX) today reported its August 2020 market statistics. COVID-19 related developments and the reopening of global economies remained in focus. The cash equity market was more active due to portfolio repositioning after the release of half-year financial results, buoyant US technology stocks and hopes for a viable COVID-19 vaccine. Equity index futures trading eased as volatility of underlying Asian markets returned to more normal levels. Iron ore derivatives volume stayed in an uptrend on China’s economic recovery.
Total securities market turnover jumped 18% year-on-year (y-o-y) to S$28.1 billion; securities daily average value (SDAV) was up 18% y-o-y at S$1.4 billion. Interest in ETFs, particularly the SPDR® Gold Shares ETF and STI ETFs, remained strong. ETF turnover was S$432 million, up 87% y-o-y. Assets under management of SGX-listed ETFs grew 20% y-o-y to S$6 billion.
During the month, SGX launched Asia’s first international REIT futures. The two contracts – the SGX FTSE EPRA Nareit Asia ex-Japan Index Futures and the SGX iEdge S-REIT Leaders Index Futures –debuted on 24 August 2020 together with six SGX FTSE Net Total Return (NTR) Index Futures. The US Commodity Futures Trading Commission has certified the two REIT futures and four of the SGX FTSE NTR Index Futures contracts for sale to US-based clients.
Bond listings declined y-o-y from the high base in August 2019 when 60 Fannie Mae mortgage-backed-securities were listed. A total of 53 new bonds raised S$21.9 billion in August 2020. They included the US$1.4 billion Vedanta Holdings Mauritius II Limited senior secured 3-year bonds and the US$1.38 billion AES Panama Generation Holdings, S.R.L. senior secured 10-year notes.
Demand for most derivatives eases
Equity index futures volumes declined 11% y-o-y to 14.9 million contracts as underlying cash equity markets stabilised. The FTSE China A50 index futures traded 8.5 million contracts, down 4% y-o-y, while the Nifty 50 Index futures traded 8% less contracts y-o-y at 1.9 million contracts.
The new SGX FTSE Taiwan Index futures volume tripled m-o-m to 352,438 contracts with daily average turnover doubling as participation increased more than 50% to over 90 trading entities.
FX derivatives volume increased 7% month-on-month (m-o-m) to 1.8 million contracts. INR/USD futures chalked up a 10% m-o-m rise in trading to 1 million contracts as foreign direct and equity fund inflows to the country buoyed the Indian rupee.
Commodities saw a 10% m-o-m gain in volume amid China’s reopening and hedging activity. Iron ore derivatives recorded volume of 2.1 million contracts, up 13% m-o-m as iron ore futures prices flirted with a multi-year high. Trading of rubber futures was up 19% m-o-m due to a pick-up in auto demand as China continued to make progress with its economic recovery.
The full August 2020 market statistics report is found here.
