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SGX securities turnover down 10% m-o-m in October, derivatives reach new highs

Jovi Ho
Jovi Ho11/14/2022 07:08 PM GMT+08  • 3 min read
SGX securities turnover down 10% m-o-m in October, derivatives reach new highs
During the month, stock market activity in Singapore was characterised by a fluid outlook for growth, trade, inflation, rates as well as earnings. Photo: Albert Chua/The Edge Singapore
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Total securities market turnover value fell 10% m-o-m in October to $23.1 billion, while securities daily average value (SDAV) slid 1% m-o-m to about $1.2 billion, reported the Singapore Exchange Group on Nov 14.

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 REIT sector, says SGX.

The bellwether Straits Times Index (STI) declined 1.2% in October to 3,093.11. This brought its total return for the first 10 months of 2022 to +2.6%, compared with -9% for the FTSE ASEAN All-Share Index and -15.6% for the FTSE Developed Index.

Derivatives volume across multiple asset classes climbed to new highs amid increased trading activity by global institutions, as optimism that central banks may moderate their interest-rate hike cycles countered concerns over China’s economic outlook.

Derivatives daily average volume (DAV) gained 23% y-o-y in October to 1.2 million contracts, the highest since March 2020.

Total derivatives traded volume across equity, foreign exchange (FX) and commodities was up 21% y-o-y at about 22 million contracts.

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The SGX Equity Derivatives suite of Asian benchmark index futures saw "robust" activity in October, as volume rose 15% y-o-y to 15.3 million contracts.

SGX FTSE China A50 Index Futures volume climbed 15% y-o-y to 8.4 million contracts, while SGX FTSE China H50 Index Futures posted a record DAV for the month.

SGX FTSE Taiwan Index Futures volume increased 17% y-o-y to 1.6 million contracts. SGX MSCI Singapore Index Futures volume gained 33% y-o-y to 1.4 million contracts, setting records for single-day volume, DAV and month-end open interest.

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On SGX Fixed Income, the amount issued from 83 new bond listings stood at $17.4 billion in October. Highlights included the Housing and Development Board’s $1.2 billion five-year green bonds, Industrial Bank of Korea’s US$600 million ($825.82 million) two-year social bonds and Komatsu Finance America Inc.’s US$600 million five-year sustainability-linked notes.

More activity in FX, commodities

Heightened inflation expectations and sustained US dollar strength drove hedging on SGX FX. Total FX futures volume surged 49% y-o-y in October to 3.3 million contracts, with SGX INR/USD Futures volume up 17% y-o-y at 1.5 million contracts.

The SGX USD/CNH Futures contract reinforced its position as the world’s most widely traded international renminbi futures, with average daily volume (ADV) rising 86% y-o-y to US$7.8 billion, an all-time high.

ADV of SGX KRW/USD Futures climbed 25% y-o-y to a record US$121.2 million, while month-end open interest increased 88% month-on-month (m-o-m) to US$155.8 million.

Iron ore prices fell in October as infrastructure and construction activity remained weak. Benchmark iron ore derivatives volume jumped 79% y-o-y to 2.5 million contracts on the back of hedging demand, lifting total derivatives volume by 55% y-o-y to 2.9 million contracts.

Petrochemicals volume gained 6% y-o-y, while the slowdown in physical commodity trading was reflected in reduced activity in freight derivatives.

Shares in SGX closed 2 cents higher, or 0.22% up, at $9.11.

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