SINGAPORE (Aug 8): Market participants in the month of July turned to exchange-traded solutions to manage volatility across multiple asset classes, resulting in strong volume gains for selected products on the Singapore Exchange.

As hedging activities increased, total SGX equity index futures volumes grew 4% y-o-y to 13.5 million contracts, a fifth straight month of annual gains. MSCI Singapore index futures also hit a record volume in July with 31% y-o-y increase to 1.0 million contracts.

To manage rising risks in currency and commodity markets, total FX futures traded volume increased 23% y-o-y to 2.1 million contracts, climbing for a third consecutive month. Notably, SGX’s USD/CNH Futures traded volume surged 31% y-o-y to 803,839 contracts in July.

In the ferrous market, forward freight derivatives traded volume jumped 60% m-o-m to 95,000 contracts, aided by volatility.

In July, total securities market turnover value rose 11% m-o-m to $24.3 billion, while securities daily average value (SDAV) dipped 8% to $1.1 billion.

Market capitalisation weighted average total returns for the overall Singapore stock market remained unchanged, compared with the Straits Times Index’s (STI) -0.2% return.

Consumer Staples, Materials and Banks, which rose 3.6%, 3.1% and 1.4% respectively, were the top performing sectors for the month. REITs posted nine straight months of positive returns, with year-to-date total returns at +21.2%.

Market turnover value of ETFs was $189 million, down 8% m-o-m but up 1% y-o-y.

July saw the listing of SGX’s third pure-play US office REIT – Prime US REIT – which was the largest IPO in Singapore year-to-date, raising the highest amount of funds in Asean this year.

Funds raised from two new equity listings amounted to $844.1 million, while the amount issued by 128 new bond listings totalled $61.4 billion. This brought the overall funds raised by issuers to $62 billion, a 70% increase y-o-y.

The Federal Reserve’s lowering of interest rates for the first time in a decade could lead to further uncertainty and flight to safety in coming weeks. In a low-yield environment, activity in REITs may also rise as investors continue to search for yield, says SGX.

Shares in SGX closed 9 cents higher at $8.11 on Wednesday.