FX volumes rise by a third at Singapore Exchange in March

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 March 2022.

Total FX futures volume on SGX stood at 2.8 million contracts in March, up 34 percent on a yearly basis and also climbed 12 percent from a quarter ago. The exchange said FX activity was lifted by Russia-Ukraine conflict, which fanned risk aversion and bolstered hedging trades. 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, derivatives daily average volume on SGX rose in March to about 1.2 million contracts, indicating a rise of 42 percent over a monthly basis and hitting the highest since March 2020. This also helped lift derivatives volume for the Q1 2022 to 64.9 million contracts, up 17 percent quarter-on-quarter over the October-to-December period. The average fee per contract for equity, currency and commodity derivatives for the quarter was S$1.55.

The monthly turnover in equity index futures volume increased 38 percent month-over-month to 18.4 million contracts compared to 13.4 million in February. A steady activity in FTSE China A50 Index Futures amid signs that the mainland’s economic growth could slow in the near term. Additionally, there were gains across the board, with SGX Nikkei 225 Index Futures volume up by more than a third, SGX FTSE Taiwan Index Futures volume climbed 31 percent, while SGX MSCI Singapore Index Futures volume was up 10 percent.

SGX is now Asia’s largest FX derivatives exchange

As the crisis over Ukraine exacerbated volatility across global markets, SGX’s commodity derivatives traded volume rose 66 percent in March to 4.1 million contracts. Securities daily average value (ADV) also jumped 21 percent month-on-month to S$1.46 billion, lifting turnover for January-to-March by 26 to S$91 billion. The average securities clearing fee for the quarter was 2.54 basis points.

Earlier in January, SGX completed the takeover of FX trading platform MaxxTrader to expand its reach in the foreign exchange space. Together with its wholly-owned subsidiary BidFX, SGX is now Asia’s largest FX derivatives exchange.

After five years operating as a division of TradingScreen, BidFX has emerged in 2017 as a standalone business focused on delivering a workflow solution for FX. Three years later, Singapore Exchange paid nearly $128 million to buy the 80 percent stake it does not own in BidFX. The transaction came as SGX was seeking to build its presence in foreign exchange futures and the over-the-counter market.

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