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- Strong volume gains across equities, FX, iron ore derivatives
- Securities daily average value in Singapore climbs
Singapore Exchange (SGX) today released its market statistics for November 2020. Progress in the development of a COVID-19 vaccine bolstered optimism of a global economic recovery, while institutional investors repositioned their portfolios following the U.S. elections, fueling strong derivative volume gains on the exchange across multiple asset classes.
Total derivatives traded volume on SGX, including equities, foreign exchange (FX) and iron ore, rose 15% month-on-month (m-o-m) in November to 18.8 million contracts, the biggest increase since May. Equity index futures traded volume climbed 17% m-o-m to 14.2 million contracts, led by a 20% increase in SGX FTSE China A50 Index Futures volume to 7.1 million and a 104% surge in SGX FTSE Taiwan Index Futures volume to 1.9 million. SGX Nifty 50, SGX Nikkei 225 and SGX MSCI Singapore Index Futures also notched steady volume gains on both a m-o-m and year-on-year (y-o-y) basis.
SGX continued to broaden its shelf of pan-Asia benchmark equity derivatives during the month, introducing new regional and single-country futures contracts based on Net Total Return and Price Return indices calculated by FTSE Russell. Of the five new contracts, the SGX FTSE Emerging Market and SGX FTSE China H50 Price Return futures are planned to be available for its Mutual Offset System (MOS) with CME Group from the first half of 2021. The unique link offers global investors unmatched, round-the-clock access to trade and clear on the leading derivatives marketplaces in Asia and the U.S.
Total FX futures traded volume on SGX rose 10% m-o-m in November to 2.1 million contracts, or 12% y-o-y. SGX USD/CNH Futures – the world’s most widely traded international RMB futures – gained 18% m-o-m to 871,870 contracts on the back of volatility amid the U.S. elections.
SGX INR/USD Futures traded volume increased 3% m-o-m to 1.2 million contracts in November as the Indian rupee appreciated the least against the U.S. dollar among Emerging Asia currencies. During the month, SGX launched a new U.S. dollar-based INR contract, based on monthly International Monetary Market (IMM) expiry dates and complementing its leading SGX INR/USD Futures contract.
SGX’s “virtual steel mill” suite of commodity derivatives continued to reflect trade flows in physical markets. Iron ore derivatives traded volume rose 8% m-o-m in November to 1.2 million contracts, the biggest gain in three months. Asia’s first truly global commodity is trading at prices near multi-year highs, driven in part by robust steel consumption in China.
Open interest in SGX forward freight agreements (FFA), as well as SGX SICOM rubber options, the global pricing benchmark for natural rubber, set record highs in November amid sustained demand for risk management. Petrochemicals derivatives, another proxy of growth in the Chinese economy, were up 82% m-o-m to 4,540 contracts – a five-fold y-o-y volume increase.
SDAV Climbs
In Singapore, total securities market turnover value rose 56% m-o-m to S$36.2 billion in November, while securities daily average value (SDAV) climbed 63% m-o-m to S$1.7 billion. The bellwether Straits Times Index (STI) posted a 15.8% price increase and 16.2% total return.
The market turnover value of exchange-traded funds (ETF) rose 26% m-o-m in November to S$457 million, while turnover of structured warrants and daily leveraged certificates (DLC) surged 110% to S$787 million. Combined month-end assets under management (AUM) of the SPDR® STI ETF and Nikko AM STI ETF reached S$2.0 billion, up 75% y-o-y.
During the month, SGX welcomed the listing of NikkoAM-ICBCSG China Bond ETF, bringing global investors a unique opportunity to capitalise on the world’s second-largest fixed income market. Launched by Nikko Asset Management (Nikko AM), one of Asia’s biggest asset managers, and the Singapore branch of Industrial and Commercial Bank of China (ICBC SG), the world’s largest bank, the ETF replicates the performance of the ChinaBond-ICBC 1-10 Year Treasury and Policy Bank Bond Index. With AUM of US$192 million at listing, the ETF provides a significant 60% exposure to Chinese policy banks bonds. Among the index constituents are onshore RMB bonds issued by Agricultural Development Bank of China, which listed its offshore bonds for the first time in October on SGX.
SGX-listed companies continued to tap the equity capital markets with secondary fundraising of S$1.3 billion in November, up 32% y-o-y. During the month, the value of new bond listings reached S$13.6 billion.
The full report can be found here.
