SGX reports record month for FX, derivative volumes

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 September 2022.

SGX

SGX’s derivatives trading volume jumped to a record on the back of heightened activity in foreign exchange and commodity futures, as challenging macro conditions spurred institutional demand to manage their portfolio risk.

Derivatives ADV rose 14 percent month-on-month to 1.05 million contracts, achieving a single-day record of 2.97 million contracts on 27 September. Total traded volume for the month climbed 14 percent from a month earlier to 22.8 million contracts.

For the July-to-September quarter, the average daily turnover was up 3 percent year-on-year with total volume gaining 4 percent over a yearly basis. The average fee per contract for equity, currency and commodity derivatives for the quarter was S$1.62.

Record month for FX futures

The unprecedented cycle of interest-rate hikes by global central banks continued to place Asian currencies under pressure, driving institutional hedging on SGX FX. The speculation had fueled volatility on key Asian currencies including the renminbi (RMB) and Indian rupee, driving risk-management demand.

As a result, total FX futures traded volume increased 31 percent YoY to 3.42 million contracts, led by a 36 percent YoY jump in SGX USD/CNH futures to 1.6 million, consolidating the contract’s position as the world’s most widely traded international RMB futures. Additionally, total notional traded value in FX contracts hit US$205 billion.

For the third quarter, volume climbed 32 percent year-on-year (YoY) to 8.55 million contracts. Open interest also increased 19 percent YoY to US$11.12 billion while SGX INR/USD Futures volume was up 25 percent MoM and 26 percent YoY at 1.63 million contracts.

During the month, SGX FX launched SGX CurrencyNode, its electronic communication network (ECN) for trading of non-deliverable forwards. The ECN provides FX market participants with access to multiple sources of OTC liquidity anonymously through a single venue, strengthening SGX FX’s position as one of Asia’s leading FX venues.

Meanwhile, total commodities volume climbed 23 percent YoY in September to 3.04 million contracts. During the month, SGX Commodities introduced a suite of energy metals derivatives to provide market participants with better price discovery on a single liquid and capital-efficient platform.

Finally, equity index futures volume rose across SGX’s franchise on the back of heightened risk-management activity triggered by central banks’ policy tightening, climbing 9 percent MoM in September to 15.1 million contracts.

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