- Stock market activity stays high with reopening of major economies informed by SGX.
- Equity and FX derivative volumes increase to three-month highs noted by SGX.
Singapore Exchange ( SGX ) today released its market statistics for June 2020. Global financial and commodity markets reflected optimism from the reopening of major economies, even as concern that new COVID-19 infections could stymie growth continued to drive demand for risk management.
Total securities market turnover value on SGX rose 74% year-on-year (y-o-y) in June to S$38 billion, while securities daily average value (SDAV) climbed 50% y-o-y to S$1.73 billion. The market turnover value of exchange-traded funds (ETF) jumped 138% y-o-y to S$487 million, as the SPDR® STI ETF traded 10 times higher y-o-y at S$210 million with fund size crossing the S$1 billion mark during the month. The benchmark Straits Times Index (STI) gained 3.2% in June to 2,589.91.
During the month, SGX welcomed Southern Alliance Mining Ltd., an established producer of high-grade iron ore products in Malaysia, to Catalist. The Asian primary bond markets continued to gain momentum in June as issuers from Asia broadly increased their fundraising activities. The value of new bond listings was up 43% month-on-month (m-o-m) at about US$23.8 billion.
In June, SGX launched 10 Singapore Single Stock Futures (SSFs) to meet growing demand for a broader suite of Singapore-linked equity products. The exchange also announced plans to introduce SGX FTSE Taiwan Index futures in July to enable global investors to gain exposure to a broad representation of large and mid-capitalisation Taiwan stocks, while meeting fund managers’ diversification objectives.
Growth in Derivatives Demand
Total equity index futures traded volume on SGX rose 20% m-o-m in June to 14.5 million contracts, the highest in three months. This was led by a 54% m-o-m increase in Nikkei 225 Index Futures traded volume to 2.23 million contracts. MSCI Singapore Index Futures traded volume climbed 14% m-o-m, while FTSE China A50 and Nifty 50 index futures each increased 12% m-o-m.
Total foreign exchange (FX) futures traded volume on SGX rose 10% m-o-m in June to 2.19 million contracts, the highest in three months, amid steady institutional demand to manage risk. SGX USD/CNH Futures traded volume gained 18% m-o-m to 851,753 contracts, while SGX INR/USD Futures climbed 3% m-o-m to 1.28 million contracts.
During the month, SGX announced its acquisition of the remaining 80% stake in BidFX, a leading cloud-based FX trading platform for institutional investors – expanding its reach as Asia’s biggest FX futures marketplace into the global over-the-counter (OTC) market and with the aim of bringing together FX futures with OTC markets.
In commodities, increased demand from economic recovery and ongoing physical supply dislocations related to COVID-19 drove participation in derivative trading. SGX SICOM rubber futures, the world’s pricing bellwether for natural rubber, increased 7% m-o-m in June to 129,420 contracts. The exchange’s pioneering high-grade iron ore futures rose to a record monthly trading volume of 55,960 contracts, with overall open interest in iron ore contracts climbing 6% m-o-m to an average of 1.84 million contracts.
Forward freight derivatives traded volume on SGX surged 83% m-o-m in June to 127,773 contracts – a record high – on the back of a recovering dry bulk freight market, in particular for the Capesize vessels driven by iron ore trade flows. The exchange offers capital efficiencies to market participants across the steel value chain through its freight, iron ore and coal derivatives.
The full report can be found here.