In line with the global trend of increasing investor appetite for ETFs, the Singapore Exchange Group (SGX Group) saw ETF market turnover value increase 29% to $411 million in December, the highest since April 2022. This is up from $348 million in November 2022, which was, in turn, up from $330 million in October 2022.
Derivatives daily average volume (DDAV) rose 8% y-o-y in December 2022, capping 4Q2020 with a 19% rise to 1.1 million contracts. Total derivatives traded volume for the quarter across equity, foreign exchange and commodities grew 18% y-o-y to 65.5 million contracts.
Similarly, securities daily average value (SDAV) on SGX grew 10% y-o-y in December 2022, while total securities market turnover value was flat.
There were a total of 21 trading days in December 2022. Owing to seasonal effects, securities market turnover value and volume were down 27.9% and 29.7% m-o-m respectively.
Continued rise in risk management activities drove derivatives volume growth in foreign exchange (FX) and commodities, says SGX Group in a Jan 10 statement, as global markets responded to another round of rate hikes by major central banks and China’s surprise reopening.
In 4Q2020 ended December, SGX MSCI Singapore Index Futures led with an 18% y-o-y gain, SGX FTSE China A50 Index Futures and SGX FTSE Taiwan Index Futures at 10%, and SGX Nifty 50 Index Futures at 5%.
See also: SGX total securities market down by 3.2% y-o-y to $27.25 bil in Nov
In 2022, several SGX Equity Derivatives' contracts hit record volumes including SGX FTSE China A50 Index Futures (102.9 million), SGX Nifty 50 Index Futures (29.9 million) and SGX MSCI Singapore Index Futures (14.5 million).
SGX FX expanded by 43% y-o-y to 2.8 million contracts in December, lifting the quarter up 65% to 10.0 million contracts.
This was led by SGX USD/CNH Futures, whose volume jumped 94% for the quarter, while SGX INR/USD Futures volume increased 37% over the same period.
See also: SGX securities turnover down 10% m-o-m in October, derivatives reach new highs
SGX FX cleared a new record of over US$2 trillion futures contracts in 2022, notes SGX Group.
Meanwhile, SGX Commodities grew volume by 12% y-o-y to 2.9 million contracts in December, marking a 39% growth in the quarter with 9.4 million contracts.
Total iron ore derivatives volume crossed the record-high three billion tonnes mark in 2022, notes SGX Group. This was up 16% y-o-y in December with a 50% rise for the quarter.
Forward freight derivatives volume grew 4%, while SICOM Rubber Futures volume rose 9% in December.
“In 2022, SGX Commodities strengthened its reputation as a global price-discovery centre for key commodities. Iron ore and freight contracts continue to gain significance as macro proxies for market cycles, alongside the introduction of new contracts that bolstered its virtual steel mill as well as electric-vehicle and polyester value chain offerings,” notes SGX Group.
‘Bright spots’ in securities
According to SGX Group, the Straits Times Index (STI) was among the strongest stock market benchmarks in one of the most challenging years for global financial markets.
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It outpaced indices across the Asia-Pacific and developed economies, and booked an 8.4% total return as at end-December 2022, versus a comparative decline of 18.3% for the FTSE Developed Index and 16.7% decline for the FTSE Asia Pacific Index.
SDAV was up 10% y-o-y in December but down 24.5% m-o-m to $935 million, while total securities market turnover value was flat.
During the month, SGX Securities marked the concurrent listing of the CSOP CSI Star and ChiNext 50 Index ETF in Singapore and China Southern CSOP CGS-CIMB FTSE Asia Pacific Low Carbon Index ETF in Shenzhen via the SZSE-SGX ETF Link.
In line with the global trend of increasing investor appetite for ETFs, SGX Securities saw ETF market turnover value increase 29% to $411 million, the highest since April 2022.
The assets under management (AUM) of all ETFs listed on SGX Securities has doubled in three years and stood at $11.1 billion as of end-December 2022.
Meanwhile, the market turnover value of structured warrants and daily leveraged certificates (DLC) in December gained 23% y-o-y with an increase of 126% for the quarter. This reflects the rising use of these products by market participants to navigate volatile markets, says SGX Group.
In December 2022, SGX Securities welcomed the listing of LMS Compliance to the Catalist board.
Finally, SGX Fixed Income saw the listing of Impact Investment Exchange’s (IIX) US$50 million Orange Bond. “This marks the world’s first Orange Bond that would invest in a multi-sector portfolio of high impact enterprises, empowering 300,000 women across Asia and Africa in building sustainable, climate-resilient livelihoods,” notes SGX Group.
Shares in SGX closed 8 cents lower, or 0.88% down, at $8.97 on Jan 10.
