SINGAPORE (Sept 10): The month of August saw 24.4% increase in total derivatives traded volume, according to Singapore Exchange (SGX) monthly release of market statistics.

On the whole, Singapore equities also recorded market volume gains amid regional market volatility, as concerns over global growth fuelled demand for risk-management solutions.

In cash equities, securities daily average value (SDAV) in the Singapore equities market rose 12% month-on-month (m-o-m) in August to $1.2 billion against a 5.9% m-o-m decline in the benchmark Straits Times Index (STI).

According to the SGX, volatility notably heightened following the US Fed’s decision in July to cut interest rates – the first reduction since the 2008 global financial crisis.

Global growth concerns were also noted to have dominated the markets, with the ongoing US-China trade tensions, a yield-curve inversion in the US bond market and Brexit uncertainties being interpreted by some participants as a recession signal.

Total commodity derivatives surged 91% y-o-y to a total of 2.74 million contracts. Notably, iron ore derivative trading volumes hit a record high of 2.48 million contracts, on the back of more international market participants adopting the commodity as a macro barometer for Asia’s growth.

In the foreign exchange (FX) markets, SGX INR/USD Futures trading volumes jumped 61% y-o-y in August to 1.6 million contracts, an all-time high, amid headwinds for the Indian rupee. The renminbi weakened with the lack of progress over trade talks between Washington and Beijing, falling below 7 against the dollar.

SGX USD/CNH Futures volumes climbed 50% y-o-y to 965,241 contracts, setting two record trading days during the month. Meanwhile, total FX futures volumes on SGX – Asia’s biggest exchange for currency derivatives – rose 59% y-o-y to 2.62 million contracts.

SGX Nikkei 225 Index Futures, SGX Nifty 50 Index Futures and MSCI Taiwan Index Futures all recorded y-o-y trading volume increases of 39%, 37% and 23% respectively. SGX’s offering of equity-index derivatives increased 14% y-o-y to 16.7 million contracts.

Global REIT indices generated gains amid the lower interest rates, and Singapore was no exception. Two REITS have been rewarded with key index inclusion from 23 September - Mapletree Commercial Trust will join the STI, while Frasers Centrepoint Trust will be part of the FTSE EPRA/NAREIT Global Real Estate Index Series (Global Developed Index).

Market turnover value of Daily Leverage Certificates (DLC) rose 52% m-o-m in August to $114 million as active investors looked to capture short-term opportunities. Market turnover value of exchange traded funds (ETF) rose 23% m-o-m in August to S$231 million, aligning with the growing preference among investors for passive investing strategies.

As at 12.31pm, shares in SGX are trading six cents lower at $8.48.