SGX pioneers interest rate derivatives on Japan repo

THE Singapore Exchange (SGX) is launching Asia's first total return futures (TRF) on May 13 as it sharpens its focus on futurised derivatives.

The listed SGX Nikkei 225 Index TRF enables investors to replicate the full economics, including the payout profile, of standard Nikkei 225 Index total return swaps, which are currently transacted over-the-counter.

The TRF, with contract months listed up to 10 years, will also allow investors to trade a particular financing cost, the implied equity repo (repurchase agreements), for the first time.

The TRF will deliver greater transparency and capital efficiency, while offering new customers an opportunity to trade and hedge repo, SGX highlighted.