Singapore Exchange launches yuan futures

Singapore

THE Singapore Exchange (SGX) on Monday launched its yuan futures for both onshore and offshore yuan hedging. Transactions in the new SGX yuan futures - which are priced against the US dollar - reached a first-day volume of 1,846 contracts, representing about 1.1 billion yuan (S$229 million) in notional value.

Key participants for the contracts include Bank of China's Singapore branch, DBS Bank and ICBC's Singapore branch, SGX said. SGX said more than one billion yuan in cash has been deposited with SGX as margin collateral by market participants. "This is in response to SGX's initiative to add RMB (renminbi) cash collateral to its list of acceptable margin collateral," SGX said. Singapore began clearing the yuan in May last year. Total yuan deposits in Singapore as at June 2014 stood at 254 billion yuan, up 84 per cent from a year ago. The average daily traded volume for yuan foreign exchange in Singapore almost quadrupled in the same period to hit nearly US$70 billion. Two other exchanges that offer yuan futures contracts are the Hong Kong Exchange and Clearing, and CME Group.