- Commodity volumes up sharply as China outlook remains in focus
- New COVID-19 variant Omicron and rising inflation key themes for equities
Singapore Exchange (SGX) today released its market statistics for November 2021. Risk management activities amid price swings in the physical market sharply lifted volumes in our commodity derivatives market.
Key themes across the various markets during the month included China’s exports data and the outlook for its property developers, the emergence in several countries of a new COVID-19 variant Omicron, increasing inflationary pressures and supply chain bottlenecks worldwide.
In November, total commodities derivatives volume jumped 52% y-o-y to 2.3 million contracts, led by strong growth in the virtual steel mill suite. Price swings stemming from bearish demand conditions and restocking optimism in the physical iron ore market drove higher price hedging activity as well as volatility in freight rates. Iron ore derivatives volume increased 54% y-o-y to 1.9 million contracts, while forward freight agreements (FFA) volume surged 115% y-o-y to 178,067 contracts. The surge in FFA trading underpins SGX’s leadership position in a growing FFA market and underscores the exchange’s unique offering for market participants to manage bulk cargo and freight risks with capital efficiencies on a single liquid venue.
China’s exports continued on its growth trajectory while its property market faced pressure. SGX FTSE China A50 futures volumes remained strong with volumes growing 6% y-o-y to 7.5 million contracts. SGX USD/CNH Futures traded volume increased 6% y-o-y to 920,559 contracts, while month-end open interest gained 11% y-o-y to US$10.2 billion.
The Indian Rupee traded in a narrow range as worries over the sustainability of India’s equity rally and the strength of the greenback offset optimism arising from the retreat in oil prices. SGX INR/USD Futures traded volume dipped 16% y-o-y to 968,358 contracts though month-end open interests soared 90% y-o-y to US$1.7 billion.
Omicron fears increase month-end equity volumes
Trading in cash equities and equity index derivatives accelerated towards the end of the month. This followed the identification of a new COVID-19 variant, Omicron, reported to be highly transmissible and which cast doubts on the efficacy of existing vaccines.
Total securities market turnover value on SGX was up 16% m-o-m at S$28.2 billion but down 22% y-o-y.
Despite the approaching holiday season, November was relatively busy in terms of new listings. Daiwa House Logistics Trust listed on Mainboard while Mooreast Holdings and Trans-China Automotive Holdings joined Catalist. In addition to Daiwa House’s listing which affirmed our leading market position for REITs and business trusts, more REIT ETFs were added, namely CSOP iEdge S-REIT Leaders Index ETF and UOB APAC Green REIT ETF.
The amount issued from 114 new bond listings on SGX, Asia’s leading international bond marketplace, rose 167% y-o-y in November to S$36.4 billion. These included DBS Bank’s GBP1 billion covered bonds, SPIC Preferred Company No. 1’s US$900 million preference shares and Renesas Electronics Corporation’s US$850 million 5-year senior notes and US$500 million 3-year senior Green notes.
The full market statistics report can be found here.
