The suite of dairy derivatives by the New Zealand Exchange (NZX) will trade exclusively on the Singapore Exchange (SGX) from Nov 29 onwards.
The partnership agreement, which was designed to unlock and boost the growth potential of the dairy derivatives market developed by NZX, was signed by both SGX and NZX on April 8.
Both parties subsequently signed a heads of agreement on Oct 13 to explore a global partnership to grow NZX’s dairy derivatives market together.
The partnership combines NZX’s market development expertise in dairy derivatives with SGX’s global distribution capability.
NZX Chief Executive, Mark Peterson, says the partnership brings together the complementary capabilities of the NZX and SGX to scale up market distribution and liquidity in the global dairy derivatives markets.
“We see this as accelerating market distribution which brings together significantly more buyers and sellers globally, increasing trading activity and benefiting all dairy participants, including the New Zealand dairy farmers and processors who find these contracts particularly important in managing risk,” he adds.
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Furthermore, the enhanced liquidity will be “driven by unprecedented access to the dairy derivatives markets via augmented trading and clearing channels,” says Peterson via a statement.
The number of trading and clearing firms has been expanded from four to more than 70, independent software vendors (ISVs) from two to more than 25, and this would be complemented by SGX’s 10 international offices offering significantly greater regional sales support.
“The past few months have been extremely fruitful for both SGX and NZX, as we worked together to execute this first-of-its-kind partnership between two exchanges to internationalise and grow the liquidity of a well-established product that will benefit the global dairy industry,” says SGX CEO Loh Boon Chye.
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“Through SGX’s global distribution network and successful derivatives franchise, we look forward to a close and fruitful collaboration to bring NZX’s suite of dairy derivatives to its next phase of growth,” Loh adds.
As at 4.45pm, shares in SGX are trading 5 cents higher or 0.55% up at $9.23.
Photo: SGX
