- Activities increased across securities and derivatives markets
- Continuous COVID-19 news flow drives risk management in all trading sessions
Singapore Exchange (SGX) today released its market statistics for March 2020. As global markets continued to be buffetted by heightened volatility amid the COVID-19 pandemic, investors actively managed their positions on the exchange across asset classes – from equities to foreign exchange (FX) to commodities.
During the month, the benchmark Straits Times Index (STI) fell 17.6% to 2,481.23. On 31 March, the STI’s 30-day volatility increased to 51.7%. That was the highest level since December 2008, on par with regional markets, while lower than the U.S. and European markets.
Securities Market
The volatility drove total securities market turnover value higher by 124% year-on-year (y-o-y) in March to S$48.2 billion, while securities daily average value (SDAV) rose 114% y-o-y to S$2.2 billion. The market turnover value of exchange-traded funds (ETF) increased more than eight times y-o-y to S$1.2 billion.
SGX’s leveraged products segment continued to draw steady interest from traders seeking to capture short-term opportunities. The market turnover value of structured warrants and daily leverage certificates (DLC) climbed 76% y-o-y in March to S$1.1 billion.
Total equity and debt fundraising on SGX reached S$11 billion during the month. United Hampshire US REIT joined the Mainboard as Asia’s first U.S. grocery-anchored shopping centre and self-storage real estate investment trust, while water-treatment company Memiontec Holdings Ltd. listed on Catalist. Chinese issuers, led by the real estate sector, were key active issuers in a relatively slower Asian primary bond market.
Risk Management
Given sustained volatility across asset classes, investors continued to tap SGX for risk-management solutions. Significantly, almost a quarter of futures contracts traded on SGX changed hands during the U.S. and European time zones, also known as the T+1 overnight session, underscoring demand for continuous price formation and round-the-clock risk management.
Total derivatives traded volume rose 41% y-o-y in March to about 33 million contracts. Equity index futures volume climbed 35% y-o-y to 25.2 million contracts, including a 138% y-o-y increase in Nikkei 225 Index Futures and a 110% y-o-y gain in MSCI India Net Total Return (NTR) Futures.
FX futures volume increased 58% y-o-y to 3 million contracts, signalling strong investor interest in accessing major Emerging Asia markets such as China and India through SGX, Asia’s largest FX futures marketplace. SGX USD/CNH Futures traded volume almost doubled to 1.3 million contracts, while month-end open interest climbed 54% y-o-y to US$5.4 billion. SGX INR/USD Futures traded volume gained 37% y-o-y to 1.6 million contracts as the Indian rupee dipped to historic lows during the month.
SGX’s suite of commodities products – iron ore, rubber, freight and petrochemicals – offer exposure to broad macroeconomic proxies on key elements of global trade. Supply-chain uncertainties have also continued to drive more physical traders to the derivatives market. In March, total commodities derivatives volume rose 76% y-o-y to 3.1 million contracts, with the exchange’s bellwether iron ore futures volume up 79% y-o-y at 2.7 million contracts. Petrochemicals volume increased 136% y-o-y on the back of heightened volatility in the oil market.
The full report can be found here.
