SGX reports record volumes for FX, Commodities in March
The Singapore Exchange (SGX), the country’s paramount exchange operator, has released its monthly volumes across its FX, derivatives and commodities segments for March 2023.
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.
Total derivatives traded volume rose 17% month-on-month in March to 23.5 million contracts, the highest in five months, while derivatives daily average volume climbed 4% MoM to 1 million contracts. The average fee per contract for equity, currency and commodity derivatives for the January-to-March quarter was S$1.65.
Equity index futures traded volume also gained 14% MoM in March to 14.9 million contracts, led by a 17% MoM increase in SGX Nifty 50 Index Futures volume to 2.7 million contracts. SGX FTSE China A50 Index Futures volume rose 3% MoM to 7.7 million contracts, reinforcing its position as the world’s most liquid international futures for Chinese equities.
Across other SGX Equity Derivatives benchmarks, there were broad-based gains in March. SGX Nikkei 225 Index Futures volume was up 84% MoM, SGX FTSE Taiwan Index Futures volume climbed 26% MoM, while SGX MSCI Singapore Index Futures volume increased 14% MoM.
More FX records
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 25 percent MoM to 3.7 million contracts, led by a 44 percent YoY jump in SGX USD/CNH futures to 2.2 million, consolidating the contract’s position as the world’s most widely traded international RMB futures. For the first quarter of 2023, volume was up 36% from the same period last year at 9.3 million contracts.
The exchange operator attributed the record high to improved China’s economic outlook and as yuan-denominated trade settlement and investments gained traction. Average daily volume (ADV) of the contract – the world’s most widely traded international renminbi futures – reached a record US$9.5 billion in March, up 79% year-on-year (y-o-y). ADV of SGX KRW/USD Futures increased 60% y-o-y to a record 8,577 lots as market volatility drove more hedging.
Confidence that China’s reopening would spur growth in Asia also boosted record activity on SGX Commodities, with total traded volume rising 20% MoM in March to 4.2 million contracts – an all-time high. For the first quarter of 2023, volume was up 22% from the same period last year at 10.6 million contracts.
SGX Commodities has recently introduced a suite of energy metals derivatives to provide market participants with better price discovery on a single liquid and capital-efficient platform.
