- Broad-based growth in trading activity across cash equities, equity derivatives and FX contracts
- Record open interest across commodity derivatives
Singapore Exchange (SGX) today released its market statistics for January 2020. Both securities and derivatives markets posted broad-based growth in volumes despite a traditionally quiet period for Asia.
While late-January marked the beginning of the Lunar New Year festivities, which saw several regional markets closed, trading activity in Singapore stocks held strong for the month. Singapore’s total securities market turnover value rose 27% month-on-month (m-o-m) to S$25.6 billion in January, while securities daily average value (SDAV) also climbed 27% m-o-m to S$1.2 billion.
Market turnover value of exchange-traded funds (ETF) on SGX increased 73% m-o-m in January to S$263 million – the highest since August 2018. Market turnover value of structured warrants and daily leverage certificates (DLCs) surged 94% m-o-m to S$920 million. Structured warrants on the Hang Seng Index were the most actively traded, with 65% of the turnover in call warrants and 35% in put warrants, while DLCs on Tencent stock were the most actively traded with 36% of the turnover in the long DLC and 64% in the short DLC.
Total equity and debt fundraising reached S$50.4 billion in January, up 49% m-o-m. Resources Global Development Limited’s initial public offering on Catalist was the first of 2020. January also saw the listing of debut international sovereign bonds by Lao People’s Democratic Republic. This reinforced SGX’s position as the key bond-listing venue in Asia, supported by recent primary bond market activities in the region led by Southeast Asian and Chinese issuers.
Optimism on Emerging Asia
SGX’s suite of equity derivatives, the world’s most liquid derivatives market for Asia, gained in January as the U.S. and China signed what was billed as the first phase of a broader trade agreement. This drove institutional investor optimism on growth prospects for Emerging Asia during the month, even as concern over the novel-coronavirus situation worsened towards the end of January.
Total traded volume in SGX equity index futures climbed 13% m-o-m in January to 14.3 million contracts – the highest in five months. This was led by a 30% m-o-m jump for both SGX FTSE China A50 Index Futures (to 7.3 million contracts) and SGX Nifty 50 Index Futures (to 2.0 million contracts). On a year-on-year (y-o-y) basis, SGX MSCI Singapore Index Futures (+33%) and SGX Nikkei 225 Index Futures (+18%) were the top performers as traded volume rose to 1.1 million contracts and 1.9 million contracts, respectively.
Trading activity in foreign exchange (FX) futures on SGX, Asia’s largest FX futures marketplace, also reflected significant investor interest in accessing Emerging Asia, especially during U.S. and European time zones. Total FX futures traded volume climbed 25% y-o-y in January – the most in four months – to 2.3 million contracts. This included a 15% gain for SGX USD/CNH Futures to 842,705 contracts.
Record Commodities Open Interest
Total iron ore derivatives traded volume was down 8% m-o-m at about 1.3 million contracts (127.7 million metric tonnes) in January as prices took a sharp turn lower, reacting to news of the coronavirus outbreak. However, during the month there were days of record open interest across SGX commodity derivatives, signalling increased adoption of the exchange’s products for risk management. These included 65% Fe fines high-grade iron ore, forward freight agreements (FFAs), as well as electricity futures.
FFA volumes in particular surged 67% m-o-m to 92,922 contracts in January as new international rules aimed at reducing sulphur emissions from the maritime sector, known as IMO 2020 regulations, came into force. SGX SICOM rubber futures, the global pricing bellwether for natural rubber, jumped 23% m-o-m to 166,240 contracts – the highest volume since May 2019.
The full report can be found here.
