SGX derivatives volume up in March on record commodity, forex activity

THE volume of derivatives traded on the Singapore Exchange : S68 0% (SGX) rose 10 per cent month on month and 12 per cent on the year to 24 million contracts in March 2024.

The bourse operator on Friday (Apr 12) attributed the rise in volume to record trading activity in commodity and foreign exchange (forex) derivatives during the month.

This in turn drove volumes for the quarter to 70.4 million contracts, or 12 per cent higher over the same period last year, with daily average volume (DAV) for the quarter gaining 14 per cent on the year to 1.2 million contracts.

The volume of commodity derivatives traded rose 32 per cent from the prior month to a record high of 6.4 million contracts, bringing the total volume for Q1 2024 up 56 per cent year on year to 16.5 million contracts.

SGX observed growth across a “broad range of products”, with the DAV for SGX Sicom rubber futures jumping to record figures for both March and Q1 2024 – including a new single-day volume high of 43,538 lots on Mar 18.

It also noted that growing financialisation in the US and Europe, along with a “physical market transiting out of prolonged supply”, continued to attract fresh participation.

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DAV for SGX petrochemicals derivatives also surged to a record for both the month of March and Q1, while the volume of benchmark iron ore derivatives grew 32 per cent month on month to an all-time high, amid increased hedging as physical prices fell.

On the forex front, total futures traded volume grew 20 per cent on the month to hit a record 4.3 million contracts. This brought total volume for the quarter up 30 per cent on the year to 12.1 million contracts.

Gains for March were led mainly by SGX USD/CNH forex futures, while international renminbi futures contracts registered a record open interest of US$18.5 billion.

The average fee per contract for equity, currency and commodity derivatives from January to March 2024 stood at S$1.54, while average securities clearing fee was 2.47 basis points.

On the securities front, the benchmark Straits Times Index advanced 26 per cent month on month to 3,224.01 in March.

Securities DAV (SDAV) for the month reached S$1.2 billion to achieve a 21 per cent higher quarterly SDAV over the prior quarter.

SGX attributed this to active trading around earnings releases and the rebalancing of indices, coupled with increased retail net buying across all stock segments.

The market turnover value of exchange-traded funds gained 9 per cent month on month to S$306 million in March, from S$280 million in the prior month.

Structured warrants and daily leverage certificates turnover grew 34 per cent on the month to S$534 million, versus S$399 million in February 2024.