SGX USD/CNH futures volume hits record high at 1.5 million contracts

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 May 2022.

SGX

Total FX futures volume on SGX stood at 3.3 million contracts in May, up by two thirds on a yearly basis. The exchange said FX activity was lifted by a 77 percent YoY jump in USD/CNH futures to 1.5 million contracts – representing a record-high monthly volume with almost US$155 billion in notional terms.

SGX INR/USD futures volume climbed 54 percent YoY to 1.6 million contracts, the highest since March 2021, representing US$41.8 billion in notional terms. SGX TWD/USD futures also hit a monthly record of nearly US$236 million notional traded.

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.

Securities daily average value (SDAV) rose 18 percent MoM in May to S$1.51 billion, while total market turnover value increased 12 percent MoM to S$28.6 billion. The benchmark Straits Times Index (STI) has gained 3.5 percent year-to-date, with reinvested dividends boosting the total return to 5.6 percent.

The market turnover value of exchange-traded funds (ETF) stood at S$353 million in May. The six SGX-listed China equity ETFs recorded a 25th consecutive month of combined net inflows, with S$468 million of net creations since 2020. This included S$104 million of net creations YTD.

The monthly turnover in equity index futures volume increased 21 percent month-over-month to 15.7 million contracts. 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 4 percent, SGX Nifty 50 Index Futures volume climbed 42 percent, while SGX MSCI Singapore Index Futures volume was up 23 percent.

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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