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- SGX remains go-to venue for managing China portfolio investments
- Securities market turnover value rises to four-month high
Singapore Exchange (SGX) today released its market statistics for September 2021. Concern over heightened regulatory risks in China spurred volume gains in SGX’s suite of China-access products, while supply-chain bottlenecks in commodity markets fueled derivative hedging in both cargo and freight.
SGX remained the go-to venue for global investors to manage portfolio investments in China. The hyper-liquid SGX FTSE China A50 Index Futures was a standout performer in September, with traded volume rising 20% year-on-year (y-o-y) to 9.3 million contracts, the highest since March 2021. SGX USD/CNH Futures – the world’s most widely traded international RMB futures – climbed 15% y-o-y to 921,663 contracts. Benchmark iron ore derivatives gained 14% y-o-y to 2.1 million contracts, extending its relevance as a barometer of the Chinese economy.
SGX’s multi-asset suite of derivatives enabled investors to tap ongoing opportunities across Asian markets. The gradual reopening of the Indian economy buoyed sentiment in equities, while elevated oil prices drove currency hedging. SGX Nifty 50 Index Futures traded volume increased 9% m-o-m in September to 2.1 million contracts and SGX INR/USD Futures rose 17% m-o-m to 1.3 million contracts. SGX MSCI Singapore Index Futures climbed 4% m-o-m to 1.2 million contracts, while SGX Nikkei 225 Index Futures advanced 72% m-o-m to 1.5 million contracts.
Capital-Efficient Platform
Challenges in the physical commodity markets continued to underpin hedging demand. Forward freight agreement (FFA) traded volume on SGX rose 19% m-o-m in September to 191,716 contracts on the back of higher rates for shipping iron ore and coal. Petrochemicals volume climbed 29% m-o-m to 4,401 contracts amid an uplift in consumer demand. SGX’s unique offering enables market participants to manage bulk cargo and freight risks on a single liquid and capital-efficient platform.
For September, total derivative traded volume on SGX gained 4% y-o-y to 21.1 million contracts. Of this, equity index futures increased 1% y-o-y to 15.6 million contracts, foreign exchange (FX) futures rose 3% y-o-y to 2.3 million contracts and commodity derivatives jumped 17% y-o-y to 2.5 million contracts.
From July to September, total derivative traded volume on SGX climbed 12% from the April-to-June period, or quarter-on-quarter (q-o-q). Equity index futures volume over the quarter gained 16.6% q-o-q, FX futures volume slid 2.8% q-o-q and commodity derivative volume increased 9.9% q-o-q. The average fee per contract for equity, currency and commodity derivatives for the quarter was S$1.45.
ETFs Outperform
Total securities market turnover value on SGX rose 11% y-o-y in September to S$27 billion, the highest in four months, while securities daily average value (SDAV) climbed 11% y-o-y to S$1.2 billion. For the July-to-September period, the average securities clearing fee was 2.57 basis points.
Exchange-traded funds (ETF) continued to outperform, with market turnover value gaining 17% y-o-y in September to S$379 million, or up 30.2% q-o-q. Turnover of structured warrants and daily leverage certificates (DLC) surged 50% y-o-y in September to S$683 million, up 49.2% q-o-q.
In September, multiple real-estate investment trusts (REIT) were added to the FTSE EPRA/Nareit Global Real Estate Index Series following FTSE Russell’s latest updates to the index inclusion rules.
During the month, SGX welcomed CapitaLand Investment Limited, a leading global real-estate investment manager to its Mainboard, while homegrown Audience Analytics Limited joined Catalist. SGX also became one of the first exchanges in Asia to enable Special Purpose Acquisition Companies (SPACs) to list on its Mainboard.
Additionally, Singapore announced a package of initiatives to support high-growth enterprises to raise capital in the public equity market, further broadening the city-state’s proposition as a financing hub. This package was announced by Singapore’s Ministry of Trade and Industry; EDBI, the dedicated investment arm of the Singapore Economic Development Board; the Monetary Authority of Singapore; Temasek and 65 Equity Partners; alongside SGX.
SGX-listed companies continued to tap the equity capital markets with secondary funds raised of S$1.7 billion in September. The amount issued from 79 new bond listings on SGX, Asia’s leading international bond marketplace, increased 4% y-o-y to S$40.1 billion.
The full market statistics report can be found here. The average fees per contract can be found here.
