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- Uneven economic recovery in Asia spurs investment and risk-management demand
- SGX’s commodities offering enables participants to hedge against cargo and freight volatility
Singapore Exchange (SGX) today released its market statistics for August 2021. An uneven economic recovery in Asia spurred demand to invest and manage risk across multiple asset classes. SGX’s commodity derivatives suite was a standout performer as price swings and supply-chain disruptions continued to challenge physical markets.
Institutional investors increased their portfolio risk management amid uncertainty over China’s outlook, after manufacturing activity in the world’s second-largest economy contracted in August for the first time in nearly a year-and-a-half. SGX FTSE China A50 Index Futures traded volume rose 4% year-on-year (y-o-y) to 8.9 million contracts, while the volume of SGX USD/CNH Futures climbed 12% y-o-y to 812,929. The SGX USD/CNH Futures is the world’s most widely traded international RMB futures contract and achieved a month-end open interest of US$11.3 billion – a record high.
Iron ore, increasingly used as a macroeconomic proxy for China, was also actively traded, as the volume of SGX’s benchmark iron ore derivatives gained 4% y-o-y in August to 2.2 million contracts. Screen adoption was particularly strong, with the second-month contract averaging over 10,000 lots daily through the past four months.
Steady growth elsewhere in Emerging Asia provided more opportunities. A broad-based economic rebound in India sustained investor optimism, while inflationary pressure fueled hedging demand. SGX Nifty 50 Index Futures traded volume rose 2% y-o-y in August to about 2 million contracts. The volume of SGX INR/USD Futures climbed 9% y-o-y to 1.1 million contracts, lifting total foreign exchange (FX) futures traded volume on SGX by 12% y-o-y to 2 million contracts.
Commodities Growth
SGX’s seaborne suite of key industrial products continues to enable market participants to capture opportunities amid volatility and disruption. Total commodity derivative volume including iron ore gained 10% y-o-y to 2.6 million contracts. Forward freight agreements (FFA) volume jumped 131% y-o-y to 160,678 contracts, underscoring the strength of SGX’s unique offering, where market participants can manage bulk cargo and freight risks on a single liquid and capital-efficient platform.
Petrochemicals volume on SGX surged 48% y-o-y in August to 3,407 contracts, while SGX SICOM rubber futures – the global pricing bellwether for natural rubber – climbed 1% y-o-y to 137,184 contracts. That was the highest volume in five months.
In Singapore, total securities market turnover on SGX increased 5% month-on-month (m-o-m) to S$26.3 billion, while securities daily average value gained 5% m-o-m to about S$1.3 billion. The market turnover value of structured warrants and daily leverage certificates (DLC) rose 8% m-o-m to S$622 million – the highest amount since November 2020 – as more underlying stocks were made available. During the month, the benchmark Straits Times Index (STI) declined 3.5% to 3,055.05.
SGX-listed companies continued to tap the equity capital markets with secondary funds raised of S$377 billion in August. The amount issued from 42 new bond listings on SGX, Asia’s leading international bond marketplace, stood at S$20.9 billion.
The full market statistics report can be found here.
