FX volume takes step back at Singapore Exchange in July

abdelaziz Fathi

The Singapore Exchange (SGX), the country’s paramount exchange operator, has released its monthly volumes across its FX, derivatives and commodities segments for July 2022.

Total FX futures volume on SGX stood at 2.5 million contracts in July, up by 16% on a yearly basis. However, the figure was lower 14 percent from 2.5 million contracts in June.

The exchange said FX activity was lifted by increased risk-management demand, as investors focused on China’s economic outlook. USD/CNH contracts – the most widely traded international RMB futures – rose by a third on a yearly basis to 1.1 million contracts, but was down when compared to 1.5 million contracts in the prior month.

The CNH or offshore RMB is increasingly being adopted as a safe-haven currency amid heightened risk aversion, and the SGX contract is now the world’s most traded CNH futures.

Meanwhile, commodity derivatives volume increased on both a YoY and month-on-month basis on the back of improved sentiment over China’s economic outlook. Commodity derivatives volume climbed 57% YoY to 3.6 million contracts, the highest since March. Demonstrating close alignment with macro developments, the SGX’s commodities offering enables market participants to express their views and manage risk efficiently.

Elsewhere, SGX Equity derivatives volumes declined on reduced volatility, but key stock indices were buoyed by steady corporate earnings and easing expectations for further significant U.S. interest-rate hikes.

SGX-listed companies continued to tap the equity capital markets in July, with secondary fundraising of almost S$2.05 billion, up 141% YoY. This was the largest amount since June 2021.  On SGX Fixed Income, Asia’s leading international bond marketplace, the amount issued from 176 new bond listings totalled S$45.9 billion in July, the highest since April.

Total securities market turnover value stood at S$18 billion, with securities daily average value at S$901 million – down from the previous month, but showing more resilience than other regional markets. Stock investors were broadly on the sidelines for most of July amid continued concern over the path of the world economy, before a pickup towards month-end.

With geopolitical uncertainty, elevated inflation and recession concerns a common theme across Asian markets, SGX Group continues to provide global investors with a highly liquid toolkit to manage risk over multiple asset classes.

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