The contract will have a notional size of S$100,000, and will be based on a basket of Singapore Government Bonds, each with a minimum issuance size of S$1 billion and of 3 to 6 years' term-to-maturity.
It will be traded from 9 am to 5 pm, Mondays to Fridays on the SGX Electronic Trading System (ETS). The contract will be cash settled upon its expiration on the third last business day of the contract month.
Mr Thomas Kloet, CEO of SGX, said, "The 5-Year Singapore Government Bond Futures will complement the SGX 3-Month Singapore Dollar Interest Rate Futures to provide the market with risk management tools covering the short and medium end of the yield curve. At the same time, these two contracts and the growing Singapore bond market will boost one another's development."
"Potential users of the contract include banks, financial institutions, insurance companies, bond portfolio managers, corporate treasurers, individual investors and SGX-DT Locals. Several banks have also expressed interest to be market makers for the new contract," added Mr Kloet.
Besides specialised ETS terminals located at SGX-DT and its members' premises, SGX ETS is also accessible through Bloomberg and GL terminals, as well as through the internet via solutions developed by independent software vendors such as patsystems and Easyscreen. This would provide market participants with direct access, better transparency, faster executions and easier trade processing.
SGX-DT contracts which can be traded electronically include Euroyen Futures, Japanese Government Bond Futures, Nikkei 225 Futures, Nikkei 300 Futures, MSCI Taiwan Index Futures, MSCI Singapore Index Futures, Straits Times Index Futures, S&P CNX NIFTY Index Futures and 5-Year Singapore Government Bond Futures.
