Trading on SGX’s FX futures hit an all-time in January, with $105 billion in notional value and 1.87 million in aggregate contracts traded. Year-on-year, this represents a 60% growth in terms of notional value and a 30% growth in the volume of contracts traded. Average daily volume (ADV) of contracts traded last month grew to approximately 85,000 contracts from 68,000 in January 2018, while the notional ADV traded per day grew to $4.8 billion in January 2019, up from $3.1 billion the same month the previous year.
Trading on SGX’s FX Futures more than doubled to $914 billion in 2018 as the exchange saw a record monthly volume of $96 billion traded in December.In aggregate, 1.76 million FX futures contracts were traded on SGX in December, up 87% from the same month in 2017. Meanwhile, the notional volume of $96 billion traded on the platform was a 122% year-on-year increase.“The robust annual growth is strong evidence of the role SGX plays as a key risk management venue for market participants as they manage their Asian currency risk exposure,” says the exchange group in its monthly newsletter.
Singapore Exchange (SGX) has successfully completed the first USD/CNH Flexible FX futures trade.The transaction involved Bank of China (Singapore) and ICBC (Singapore) executing two CNH FlexC FX futurised swap trades on SGX. A total notional value of $8 million changed hands.“The transaction marks a major step forward in bringing together the listed and OTC markets in FX. With global regulatory initiatives such as Basel III and MIFID II coming into play, financial institutions are facing an increasing burden of capital requirements that include Leverage Ratio, Liquidity Coverage Ratio and Counterparty Credit Risk charges, as well as Uncleared Margin Rules (UMR) for OTC derivatives.
Greater automation in emerging markets is widely seen to be merely a matter of time. Profit & Loss talks to Darryl Hooker, former co-head of EBS Brokertec Market and currently consultant at Capitolis about his experience in helping bring a larger ‘e’ focus to Russia and China.
Profit & Loss: Can you give us an insight into the thinking that saw you focus on first Russian markets and then China when you were at EBS? What are the main signals that identify a frontier market ready to move into the mainstream of EM?
Darryl Hooker: A common pitfall in emerging markets is to make the mistake of considering them collectively despite the fact that they have very particular and specific nuances.
Galen Stops quizzes Jon Vollemaere, CEO of R5FX, about whether fintech solutions will be used in China, and emerging markets more broadly, to effectively replicate existing FX markets or create an entirely new ecosystem.
Galen Stops: How does the FX market in China compare to those in Europe and the US?
Jon Vollemaere: A lot of the Chinese dealing rooms look like the Western FX markets of the late ‘90s in the way that they’re set up and the lack of technology in them.
The total volume of FX futures traded on SGX in July was 1.7 million, down 8% month-on-month, despite the exchange seeing record volumes in its USD/CNH futures.
Although volumes were down last month compared to June, they were still up 124% year-on-year. The monthly decrease appears to have been driven by a decline in volumes on SGX’s INR/USD futures, with trading down 23% m-o-m but still up 81% y-o-y.
The bright spot for SGX in July was trading on its USD/CNH futures, as a record $61.5 billion in notional was traded on these contracts, bringing the total volume of these contracts cleared to over $255 billion this year.
Singapore Exchange (SGX), is launching a new product, SGX FlexC FX Futures, with the aim of “futurising” certain OTC FX product offerings.
Targeted for launch on August 27, SGX FlexC FX Futures – developed in consultation with market participants – enable bilateral trades that are privately negotiated with tailored expiration dates to be registered and cleared like a standard SGX FX futures contract. This feature will be available for INR/USD, KRW/USD, TWD/USD, USD/CNH and USD/SGD contracts.
Michael Syn, head of derivatives at SGX, says: “Access to counterparty credit, especially for tenors longer than spot, is increasingly scarce and expensive in the OTC FX markets.
SGX has reported that 1.09 million FX futures contracts were traded on its platform last month, up 88% compared to April 2017.
This also represents the fourth consecutive month that the number FX contracts on the exchange have exceeded over 1 million.
The cumulative open interest for all FX contracts is up 37% m-o-m and 74% y-o-y. In April, SGX also reached the milestone of $ 1 trillion worth of cumulative notional trading in INR/USD and USD/CNH futures since their inception in 2013 and 2014, respectively.
The aggregate volume for SGX FX futures stayed above 1 million contracts, or approximately US$ 53 billion, for the full month, representing year-on-year (y-o-y) growth of 99.3%.
The average daily volume (ADV) of FX contracts traded on the exchange in February was 1.17 million. On a Year-to-Date (YTD) basis, this represents an increase of 123% over the corresponding period in 2017.
SGX’s USD/CNH futures saw a pick-up in activity last month, with 10 successive days of trading in excess of $1 billion, including two consecutive days of trading above $2 billion.
Singapore Exchange (SGX) set a new volume and open interest records for its USD/CNH futures contract in January.
A total of 297,011 USD/CNH futures contracts with a notional value of $29 billion traded on SGX’s platform last month. This represents an increase of 175% y-o-y and comes after the exchange reported full-year growth in trading on the contract of 270% in 2017 compared to the previous year.
Meanwhile, the daily open interest for this product reached a new high of 31,278 contracts, with a notional value of $ 3.21 billion, on 26 January.