SGX sees robust derivatives and commodity trading activity in July

SINGAPORE – A total of 20.5 million derivative contracts were traded during in July. Notably, there was significant trading activity in commodity and foreign exchange (FX) contracts, which contributed more to the overall trading volume than equities did.

According to Singapore Exchange (SGX), commodity derivatives traded volume rose 17% y-o-y in July to 4.3 million contracts, a record high.

“Optimism of stimulus steps from the Chinese government to support the country’s post-pandemic rebound spurred trading activity, including among financial participants seeking to express their views on Asia’s biggest economy,” it said in a statement today.

Benchmark iron ore derivatives volume climbed 16% y-o-y in July, with forward freight agreement (FFA) volume increasing 23% y-o-y.

Petrochemicals volume gained 16% y-o-y, while the volume of SICOM rubber futures, the global pricing bellwether for natural rubber, rose 45% y-o-y.

The unique SGX Commodities offering enables institutional investors to risk-manage both cargo and freight on a single liquid and capital-efficient platform.

Record ADV for CNH futures

Cooling inflation in the US turned market participants’ focus to the outlook for interest rates, bolstering hedging activity in FX.

“Total futures traded volume on SGX FX climbed 32% y-o-y in July to 3.3 million contracts, the highest in four months, with increased trading activity in longer-tenor contracts.

“Gains were led by an 85% y-o-y jump in SGX USD/CNH Futures volume amid a widening yield gap between the U.S. dollar and Chinese renminbi (RMB).

“Average daily volume (ADV) of the contract, the world’s most widely traded international RMB futures, reached another record high of US$10 billion during the month.

“Aggregate open interest in the contract stood at about US$12.3 billion as global investors continued to hedge their portfolio exposures,” it said.

Unified liquidity pool for GIFT Connect

On SGX Equity Derivatives, index futures traded volume was 8% lower month-on-month (m-o-m) in July at 12.5 million contracts.

“The NSE IX-SGX GIFT Connect started full-scale operations on 3 July, with a successful first roll of a combined US$9 billion of open interest in GIFT Nifty 50 futures and options on the back of strong support by our clearing members.

“During the month, GIFT Nifty futures daily average volume (DAV) grew six times m-o-m to 69,000 lots or a notional US$3 billion, as a competitive orderbook with a tight bid-offer spread of 0.6 basis point demonstrated the strength of a unified liquidity pool.

“SGX FTSE China A50 Index Futures volume was steady m-o-m in July at 7.4 million contracts. The contract remained the world’s most liquid international futures for Chinese equities, with ADV of US$5 billion and month-end open interest of US$13 billion.

“SGX FTSE Taiwan Index Futures volume rose 1% m-o-m to 1.5 million contracts.

“SGX MSCI Singapore Index Futures volume climbed 14% m-om to 1.2 million contracts as volatility in the underlying index lifted trading activity,” it said.

Securities turnover grows

On SGX Securities, total market turnover value increased 19% y-o-y in July to S$21.5 billion, while securities daily average value (SDAV) gained 14% y-o-y to S$1 billion.

The benchmark Straits Times Index (STI) advanced 5.2% during the month to 3,373.98. For the first seven months of 2023, the STI has risen 3.8%, outperforming most regional Southeast Asian equity indices.

“Market turnover value of structured warrants and daily leverage certificates (DLC) climbed 17% y-o-y in July to S$614 million.

“Turnover of the recently issued Singapore Depository Receipts (SDR) on Thailand blue-chip companies increased 37% m-o-m.

“Turnover of exchange-traded funds (ETF) gained 16% m-o-m to S$256 million, largely contributed by the two STI-tracking ETFs.

“SGX-listed companies continued to tap the equity capital markets in July, with secondary fundraising higher m-o-m to S$1.2 billion,” it said.

On SGX Fixed Income, Asia’s leading international bond marketplace, the amount issued from 121 new bond listings was up m-o-m at S$28.3 billion in July.

Highlights included LG Chem Ltd’s US$2 billion dual-tranche exchange bonds, Nomura Holdings Inc.’s US$1.5 billion dual-tranche senior notes offering, Azul Secured Finance LLP’s US$800 million senior secured notes due 2028, as well as Nonghyup Bank’s US$600 million agriculture supportive social notes due 2028.

The full market statistics report can be found here.