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- Risk-management demand drives volume gains in equities, FX and commodities
- Strong ETF market participation across retail and institutional client segments
Singapore Exchange (SGX) today released its market statistics for October 2021. Risk-management demand drove volume gains across multiple asset classes, as investors weighed global economic optimism against uncertainty over the pace of China’s recovery.
Derivatives traded volume on SGX rose 11% year-on-year (y-o-y) in October to 18.1 million contracts, with equity index futures up 10% y-o-y at 13.3 million contracts, foreign exchange (FX) futures up 14% y-o-y at 2.2 million contracts and commodities up 21% y-o-y at 1.8 million contracts.
SGX FTSE China A50 Index Futures traded volume climbed 23% y-o-y in October to 7.3 million contracts. The benchmark contract for international A-share investors registered a record 591,040 contracts during China’s Golden Week holidays, demonstrating its efficacy for round-the-clock portfolio risk management.
SGX Nifty 50 Index Futures traded volume increased 13% y-o-y in October to 2.3 million contracts, as open interest held above US$8.3 billion amid optimism over India’s growth outlook. During the month, SGX India Connect IFSC Pte Ltd. was inaugurated in Gujarat International Finance Tec-City (GIFT City) and the GIFT Data Connect was launched – another milestone in delivering the NSE IFSC-SGX Connect. SGX MSCI Singapore Index Futures were up 14% y-o-y at 1.1 million contracts.
FX market participants bolstered portfolio hedging on key Emerging Asia currencies. SGX INR/USD Futures traded volume rose 14% y-o-y in October to 1.3 million contracts as India’s energy and raw-material costs continued to climb, adding to inflationary concerns. China’s regulatory scrutiny of its technology industry showed signs of easing even as challenges in the property sector lingered. SGX USD/CNH Futures traded volume gained 7% y-o-y to 790,720 contracts, while month-end open interest increased 12% y-o-y to US$10.3 billion.
Risk Management in Commodities
SGX's bulk commodities offering drew strong risk-management activity. Benchmark iron ore derivatives traded volume rose 24% y-o-y in October to 1.4 million contracts, while forward freight agreement (FFA) traded volume jumped 101% y-o-y to 185,138 contracts. Freight derivative volume remained elevated due to swings in the Capesize segment, with prices almost halving on the back of reduced seaborne iron ore activity.
Petrochemicals volume climbed 35% y-o-y in October as heightened consumer activity fueled hedging in monoethylene glycol (MEG), the key feedstock for the polyester value chain. SGX’s MEG futures volume surpassed 315,000 metric tonnes (MT) during the month, up more than 10 times y-o-y to a record high.
SGX SICOM rubber futures – the global pricing benchmark for natural rubber – rose to 163,219 contracts in October amid increased market activity to protect against bad weather. That was the highest volume since March.
Strong ETF Participation Amid Securities Trading Growth
Total securities market turnover value on SGX gained 5% y-o-y in October to S$24.3 billion, while securities daily average value (SDAV) was up 10% y-o-y at S$1.2 billion. During the month, the bellwether Straits Times Index (STI) advanced 3.6% to 3,198.17, bringing the total return for the first 10 months of 2021 to 15.7%.
The market turnover value of exchange-traded funds (ETF) on SGX climbed 30% y-o-y in October to S$473 million, the highest in three months. There was strong participation across retail and institutional client segments, as well as record turnover for the iShares USD Asia High Yield Bond ETF on the back of S$1 billion of inflows.
During the month, SGX and UOB Asset Management (UOBAM) jointly launched the iEdge-UOB APAC Yield Focus Green REIT Index that tracks real-estate investment trusts (REITs) listed across Asia-Pacific with higher dividend yields and positive environmental attributes.
The amount issued from 66 new bond listings on SGX, Asia’s leading international bond marketplace, increased 11% y-o-y in October to S$38.9 billion. These included Industrial and Commercial Bank of China’s multi-branch issuance of green bonds across four currencies and five tranches, the Republic of Korea’s EUR700 million five-year green bond – the sovereign’s maiden green bond – and TSMC Arizona Corporation’s US$4.5 billion four-tranche senior notes offering.
The full market statistics report can be found here.
