SGX’s USD/CNH futures hit a record ADV of US$7.8 billion in October

abdelaziz Fathi

The Singapore Exchange (SGX) notched a healthy gain in its FX and indices volumes, as well as a strong performance across commodity and securities segments.

SGX

Total FX futures volume on SGX stood at 3.3 million contracts in October, up by 50 percent on a yearly basis. Heightened inflation expectations and sustained U.S. dollar strength drove hedging on SGX FX, Asia’s most comprehensive currencies marketplace.

The exchange said FX activity was lifted by an 86 percent YoY jump in USD/CNH futures with average daily volume (ADV) of US$7.8 billion – representing a record-high monthly volume in notional terms. ADV of SGX KRW/USD Futures also climbed 25% YoY to a record US$121.2 million, while month-end open interest increased 88% month-on-month to US$155.8 million.

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) dropped 1 percent MoM in October to S$1.2 billion, while total market turnover value fell 10 percent MoM to S$23.1 billion. However, the market turnover value of structured warrants and daily leverage certificates (DLC) rose 71% MoM in October to S$1.1 billion

During the month, stock market activity in Singapore was characterised by a fluid outlook for growth, trade, inflation, rates as well as earnings. Net fund inflows were led by the industrials, telecommunications, technology and energy sectors, while net outflows were largely attributed to the real-estate investment trusts (REIT) sector.

On SGX Fixed Income, Asia’s leading international bond marketplace, the amount issued from 83 new bond listings stood at S$17.4 billion in October. Highlights included the Housing and Development Board’s S$1.2 billion five-year green bonds, Industrial Bank of Korea’s US$600 million two-year social bonds and Komatsu Finance America Inc.’s US$600 million five-year sustainability-linked notes.

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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