SGX FTSE China A50 Index Futures sets new record

SINGAPORE Exchange (SGX) on Thursday said that the SGX FTSE China A50 Index Futures has on Jan 27 set a new daily record of 594,551 contracts traded during the roll period.

Open interest peaked at 591,501 contracts on Jan 26, with 310,640 contracts being established in the February contracts by Jan 27, two days before the January expiry, according to data from SGX.

These new records were set after the exchange had reduced the tick size of SGX FTSE China A50 Index Futures from five points to 2.5 points from Jan 5, SGX said.

The halving of tick size has helped reduced the bid-offer spread from approximately 6.5 basis points (bps) to 3.2 bps, making the contract one of the most cost-efficient offshore China A-share access products, and enabling these participants to more precisely manage their China exposure, said SGX.

It added that the recent outflow of funds from leading China-related Hong Kong-listed exchange traded funds signals the receding of bullish interest by global investors, which has spilled over to the SGX FTSE China A50 Index Futures market.

For instance, the China ETFs, the iShares FTSE China A50 Index ETF (2823 HK) and CSOP FTSE China A50 ETF (2822 HK) saw an outflow of funds in recent months as total assets under management shrank by approximately US$2 billion and US$806 million respectively from the beginning of January, after seeing growth in investor interest for most part of 2014.