SGX to offer bond futures for India, South-east Asia

[SINGAPORE] The Singapore Exchange (SGX) will launch futures tied to government bonds of some Asian countries as investors seek to hedge their risks.

The bourse plans to launch the futures in the coming weeks, SGX chief executive officer Loh Boon Chye said at an event in Florida, confirming an earlier report by Bloomberg. “There’s clear demand,” he said.

The rollout comes as bond markets tumbled amid anxiety about the global economy after crude oil prices surged. Loh added that there was already a growing divergence in monetary policy between different countries in the region before the Iran war. Such products would allow investors to hedge their exposure to interest-rate swings by buying or selling bonds at a later date on exchanges.

SGX plans to offer contracts on notes from India, Indonesia, Malaysia, Thailand and the Philippines, people familiar with the matter have said. The bourse will offer bond futures of three, five- and 10-year maturities per country, they said. The futures would be settled in US dollars, with pricing based on average yield of a basket of no more than three sovereign bonds.

Global funds continued to be net buyers of bonds in the Philippines and Thailand this year. Investors have also poured around US$16 billion into India’s bonds since the country’s inclusion in JPMorgan Chase’s flagship index in June 2024, according to clearing house data compiled by Bloomberg.

At present, the SGX offers Japanese government bond futures, Singapore overnight rate average futures and Tokyo overnight average rate futures, according to its website. The bourse has ventured into new offerings in recent months, as it looks to expand into new segments popular with investors such as crypto futures. BLOOMBERG