The Covid-19 virus is still the talk of every town, as markets are focused on the reopening of global economies amid the current lack of a cure or vaccine, as well as news on several other countries experiencing a second wave of infection.
According to Singapore Exchange (SGX) in its July market statistics report released on Aug 11, the cautious market has caused the equity market activity to remain higher than a year ago, but moderated from a strong June.
Equity index futures trading was more active as risk management remained in focus. Iron ore derivatives reflected optimism about China’s recovery and a broader Asian economic rebound from the pandemic.
On the back of that, SGX recorded total securities market turnover of $25.5 billion for the month of July, over 21 trading days, down 23.1% m-o-m, but up 5% y-o-y. With securities daily average value (SDAV) for the month coming in 15% higher y-o-y at $1.2 billion.
There were 22 trading days in June 2020, and 23 in July 2019.
The market turnover value for exchange traded funds (ETFs) more than doubled y-o-y to $444 million from $189 million in July 2019 on institutional and retail investor interest, particularly around the Standard and Poor's Depository Receipt (SPDR) Gold ETF – which was driven by surging gold prices – and Straits Times Index (STI) ETFs.
Year-to-date, prices in gold have surged some 31.1% to trade at US$1,989 per ounce as at 6.02pm on Aug 11. Comparing m-o-m, gold prices reached around US$1,975 on July 31, as compared to US$1,781 on June 30.
Meanwhile, assets under management (AUM) of SGX-listed ETFs grew 20% y-o-y to $6 billion.
During the month, medical services group Singapore Paincare Holdings joined the Catalist board, bringing total equity funds raised to $522 million, up 6.7%.
See: Singapore Paincare Holdings kicks off IPO with 24.3 million shares at 22 cents each
As for bond listings, SGX said that this has improved from June amid more certainty about the outlook for interest rates. A total of 72 new bonds raised $35.5 billion, though this was less than pre-Covid-19 levels a year earlier.
Separately, total financial derivatives volume was 26% up y-o-y at 23.8 million contracts, with the increase coming mostly from equity index futures. The FTSE China A50 index futures traded 76% more contracts y-o-y at 12.8 million contracts, and the Nifty 50 Index futures saw a 19% y-o-y increase to 2.1 million contracts, while the MSCI Taiwan Index futures experienced a 4% rise in volume to 1.8 million contracts.
SGX earlier on Aug 11 also announced that it will be expanding its pan-Asia shelf of benchmark equity derivatives with a comprehensive series of Asia Ex-Japan and Emerging Markets (EM) Asia regional and single country futures. The 13 new futures, which will be launched in August and September, will cover almost 100% of Asia’s GDP. The new futures offer benchmarks in countries including Indonesia, Malaysia, Philippines, Taiwan, Thailand and Vietnam.
The SGX FTSE Taiwan Index futures contract, which was introduced in July, began trading and achieved a total volume of 82,048 contracts in two weeks with participation from more than 60 trading entities. Together with the MSCI Taiwan Index futures, SGX has 99.8% of volume and open interest market share across all offshore Taiwan equity index price return futures.
See: SGX to include SGX FTSE Taiwan Index futures to gain exposure to fast-growing Taiwan stock market
FX derivatives volume moderated due to a dip in volatility, with total volume a fifth lower y-o-y at 1.7 million contracts, and INR/USD futures volume a quarter down to 923,861 contracts.
Finally, commodities saw a 1% y-o-y gain in volume to 2.1 million contracts amid China’s reopening and continued supply chain disruption. Iron ore derivatives had 2% more volume y-o-y at 1.8 million contracts, while forward freight derivatives saw an 8% rise in volume to 102,740 contracts.
To recap, SGX on Aug 3 announced its FY20 results, which saw FY20 earnings increase 20.6% y-o-y to $471.8 million, as revenue reached an all-time high of $1.05 billion, 15.7% higher than the previous year. This record revenue caused analysts to turn bullish on the bourse.
See: Analysts upgrade calls on SGX following record revenue for FY2020
Shares in SGX closed flat at $8.64 on August 11.
