Singapore Exchange proposes bond futures for India, South-east Asia

THE Singapore Exchange (SGX) held multiple calls with treasury officials from global banks about introducing futures tied to some Asian government bond markets, according to people familiar with the matter.

The bourse discussed introducing the futures for countries including India, Indonesia, Malaysia, the Philippines and Thailand, the people said, asking not to be named discussing private matters.

Such futures allow investors to hedge their exposure to interest-rate swings by buying or selling bonds at a later date on exchanges. 

The discussions reflect the growing interest in the region’s debt markets. Indian bonds have been joining global indices over the past 1.5 years, while Malaysian securities were investor favourites last year, delivering the strongest performance in emerging Asia.   

For the proposed products, the SGX discussed offering three-year, five-year and 10-year maturities per country, the people said.

They added that the futures would be settled in US dollars, with pricing based on an average yield of a basket of no more than three sovereign bonds.

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For India, the bonds most likely to be considered would fall under the so-called Fully Accessible Route framework, which would make them eligible for inclusion in global indices, the people said.

Clearing house data showed that overseas investors have poured US$21 billion into the nation’s sovereign bonds since they were added to JPMorgan Chase’s flagship index in June 2024.

The SGX aims to introduce the futures in the first half of 2026, potentially as early as the first quarter, the people said, adding that the discussions are preliminary and that details may change. BLOOMBERG