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- Investor demand for ETFs grows in 2020
- Highest monthly volume of commodity derivatives traded since March 2020
Singapore Exchange (SGX) today released its market statistics for December 2020. The rollout of COVID-19 vaccines in major economies bolstered optimism of a global recovery, while exchange-traded funds (ETF) were a bright spark for the year, reflecting broadening investor demand for convenient and cost-effective index exposure.
Total securities market turnover value on SGX rose 21% y-o-y in December to S$24.4 billion, while securities daily average value (SDAV) gained 15% to S$1.1 billion. ETF turnover jumped 131% to S$350 million, as turnover of structured warrants and daily leveraged certificates (DLC) climbed 4% to S$495 million. The listing of the Lion-OCBC Securities Hang Seng TECH ETF enhanced efficient access to the fastest-growing Chinese technology companies. The ETF had month-end assets under management (AUM) of S$92 million, compared with S$64 million at listing.
For 2020, the combined AUM of all ETFs on SGX increased 57% to S$8.6 billion, compared with S$5.5 billion in 2019. Turnover was up 2.5 times at S$5.4 billion. This was in line with trading activity in the broader securities market, as investors focused on stocks most impacted by COVID-19 containment measures.
Continued Fundraising Activities
SGX welcomed Credit Bureau Asia Limited and G.H.Y Culture & Media Holding to its Mainboard in December. By the end of the month, the counters had advanced 41% and 3% respectively, outperforming a 1.3% uptick in the benchmark Straits Times Index (STI). Aedge Group Limited, which listed on Catalist, also held its gains into the new year.
SGX, Asia’s largest international bond marketplace, signed a Memorandum of Understanding (MOU) with China Central Depository & Clearing Co. (CCDC), a central securities depository for Chinese government bonds, in a wide-ranging agreement to strengthen and promote the bond markets of both countries. The pact, CCDC’s first comprehensive MOU of strategic cooperation with an international exchange, covers the full lifecycle from issuance to settlement and custody.
In December, the onshore bond listing of China Development Bank marked the first time that China onshore renminbi (RMB) bonds were listed on SGX. The overall value of new bond listings reached S$25.1 billion, up 85% on a month-on-month (m-o-m) basis.
Growing Institutional Participation
Total derivatives traded volume on SGX rose 6% y-o-y to 18.4 million contracts in December. Equity index futures traded volume climbed 4% to 13.2 million contracts, led by a 24% increase in SGX Nifty 50 Index Futures and a 19% upswing in SGX FTSE China A50 Index Futures. SGX FTSE Taiwan Index Futures, launched in July, continued to gain participation among institutional investors, advancing 9% m-o-m to 2.1 million contracts.
Foreign exchange (FX) futures traded volume on SGX increased marginally y-o-y to 2.1 million contracts in December. SGX USD/CNH Futures climbed 11% to 872,511 contracts as the RMB appreciated further on the back of China’s economic recovery, as well as expectations that Beijing-Washington relations may improve following the U.S. elections in November. The SGX contract is the world’s most widely traded international RMB futures.
SGX INR/USD Futures traded volume fell 12% y-o-y to 1.1 million contracts in December amid reduced market volatility. While trading activity in futures linked to the Indian rupee was subdued across all exchanges and over-the-counter markets, SGX’s global volume market share expanded to over 66%, adding almost 10 percentage points.
In commodity markets, iron ore derivatives traded volume on SGX increased 45% y-o-y to 2 million contracts in December on the back of strong steel demand in China. This led a 45% gain in total commodity derivatives traded volume to 2.4 million – the highest since March 2020.
SGX’s unique “virtual steel mill” derivatives suite continued to reflect physical trade flows across iron ore and shipping. Forward freight derivatives traded volume rose 51% y-o-y to 84,036 contracts in December. Petrochemicals volume, another proxy of the recovery in consumption, surged 134% to 2,341 contracts. SGX SICOM rubber futures, the world’s pricing bellwether for natural rubber, climbed 10% to 149,254 contracts.
The full market statistics report can be found here.
