- FX daily volume achieves record high, rises above US$100 billion for the first time
- Commodities volume jumps by a third in first six months of 2023
Singapore Exchange (SGX Group) today released its market statistics for June 2023. Heightened risk-management activity lifted foreign exchange (FX) volume to new records, while commodities volume in the first half of the year surged over the same period in 2022.
Total derivatives traded volume across multiple asset classes climbed 4% month-on-month (m-o-m) in June to 21.3 million contracts, the highest in three months. On SGX Equity Derivatives, equity index futures traded volume gained 2% m-o-m to 13.6 million contracts. The SGX FTSE China A50 Index Futures remained the world’s most liquid international futures contract for Chinese equities, with volume steady m-o-m at 7.4 million contracts.
Open interest in SGX FTSE Taiwan Index Futures continued to climb, reaching US$9.6 billion on 26 June, the highest since the contract’s introduction in 2020, amid positive investor sentiment towards Taiwan’s semiconductor sector. SGX FTSE Taiwan Index Options were launched during the month.
As part of efforts to mobilise capital towards climate transition, SGX Equity Derivatives in June launched five futures contracts based on the MSCI Climate Action Indexes, offering global investors a wider range of solutions to help meet their net-zero commitments.
Record FX futures and OTC FX ADV
Uncertainties over the growth outlook in key Asian economies, coupled with continued tightening by major central banks around the world, bolstered risk-management activity on SGX FX. In June, the combined average daily volume (ADV) of FX futures and over-the-counter (OTC) FX contracts from BidFX, MaxxTrader and SGX CurrencyNode rose above US$100 billion for the first time.
FX futures traded volume increased 12% m-o-m in June to 3.3 million contracts. SGX USD/CNH Futures volume climbed 16% m-o-m, as ADV hit a record-high 98,000 lots or US$9.8 billion notional. SGX INR/USD Futures volume gained 11% m-o-m, with open interest setting a record 164,332 lots or US$4.1 billion notional on 26 June.
For January-to-June 2023, FX futures traded volume totalled 18 million contracts, up 13% from the same period in 2022. This was led by a 44% y-o-y growth in the volume of SGX USD/CNH Futures – the world’s most widely traded international RMB futures contract.
Iron ore grows as macro proxy
Optimism around China’s reopening continued to spur trading and hedging interest in commodity derivatives, with iron ore in particular serving as an important macroeconomic proxy for financial participants.
Commodity derivatives traded volume rose 35% y-o-y in June to 3.9 million contracts, with iron ore volume up 36% y-o-y. Freight trading activity also increased, as the unique SGX Commodities offering enables institutional investors to risk-manage both cargo and freight on a single liquid and capital-efficient platform. Forward freight agreement (FFA) volume climbed 33% y-o-y.
For January-to-June 2023, commodity derivatives traded volume totalled 21.6 million contracts, up 33% from the same period in 2022. Iron ore derivatives volume gained 37% y-o-y, as FFA volume rose 23% y-o-y. The volume of SICOM rubber futures – the global pricing bellwether for natural rubber – increased 28% y-o-y, while petrochemicals volume was up 8% y-o-y.
Securities daily average value (SDAV) climbed 14% m-o-m in June to S$1.2 billion, up 2% y-o-y, while total securities market turnover value was 3% higher m-o-m at S$23.7 billion. The benchmark Straits Times Index (STI) advanced 1.5% in June to 3,205.91. For January-to-June 2023, reinvested dividends boosted the STI’s total return to 1.2%.
The market turnover of structured warrants and daily leverage certificates (DLC) expanded 31% m-o-m in June to S$776 million, on the back of elevated volatility in Hong Kong equities. During the month, UBS listed DLCs on Tencent, Alibaba and BYD – the first batch of U.S. dollar-denominated, single-stock DLCs available on SGX Securities.
Singapore Depository Receipts (SDR) marked the first month of trading, offering investors an opportunity to gain exposure to some of Thailand’s largest blue-chip companies.
Total assets under management (AUM) of exchange-traded funds (ETF) on SGX Securities increased 3% m-o-m in June to S$11 billion. SGX Securities welcomed the listing of CSOP iEdge Southeast Asia+ TECH Index ETF. Managed by CSOP Asset Management Pte Ltd., the ETF offers investors access to the fast-growing digital and technology sectors in Southeast Asia and India.
During the month, Pasture Holdings Ltd., a pharmaceutical product, and medical supplies and devices company, joined Catalist.
SGX-listed companies continued to tap the equity capital markets in June, with secondary fundraising totalling S$289.8 million. For January-to-June 2023, secondary fundraising totalled S$2.4 billion, up 91% from the same period in 2022.
On SGX Fixed Income, Asia’s leading international bond marketplace, the amount issued from 101 new bond listings stood at S$18.7 billion in June. Among the highlights were Khazanah Nasional Berhad’s US$1.5 billion dual-tranche offering that included a US$750 million five-year Sukuk tranche, as well as a NZ$225 million catastrophe bond by Totara Re Pte Ltd., a special purpose reinsurance vehicle incorporated in Singapore and sponsored by Toka Tū Ake EQC, also known as the Earthquake Commission.
The full market statistics report can be found here.