SGX Suffers Weak Derivatives, But Still Holds Strong FX

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It seems that the global economy is growing weaker, with things like trade wars and Brexit, the amount of money flowing seems to have taken a dive. SGX, or the Singapore Exchange, has recently released its monthly volumes for September 2019.

The securities and derivatives volumes have taken a grim turn, having one of the lowest turnover readings in all of SGX’s 2019 year. What’s startling to realize that this “lowest” number is, in fact, a staggering S$19.7 billion. It just goes to show how much money can move around in these kinds of exchanges.

This reading is considerably lower than the August 2019 report. Going from month-to-month, SGX’s turnover dropped 17% from August’s S$23.7 billion.

SGX’s turnovers aren’t the only thing that’s dropped this month. Interestingly enough, the total trading days of the September report is lower than August’s. September totes a 20 trading day month, while August sits just above it with 21. This contrasts with most other institutional venues, who, for the most part, report an increase in volumes.

SGX’s daily average in trading took a hit as well, having gone under the S$1 billion mark. This S$940 million is 21% lower than August’s, which stood at a hefty S$1.18 million.

FX Still Standing Strong

Even if its securities and derivatives took a chunky hit, SGX’s total market capitalization remains almost unchanged compared to the month prior. Month-to-month, they didn’t even lose a full percentage point, with September 2019 clocking in at S$914 billion while August 2019 clocked at S$917 billion.

This is mostly thanks to SGX’s Forex segment managing to carry all the weight the other segments dropped. It’s the second month in a row where the segment improved, with total FX volumes standing at 2.27 million contracts for September 2019. That’s 39% higher, year-for-year, from the 1.63 million contracts just a year ago.

Even so, the figure still plays second place against August 2019’s reading, which clocked in at an impressive 2.62 million. August 2019’s FX contracts were, unsurprisingly, one of the highest readings of SGX’s 2019 year.

Interestingly enough, within SGX, there was an almost 74% jump, year-to-year, of SGX’s USD/CNH futures. The numbers clocked in at 828 619 contracts for just this one form of currency exchange.

The new Institutional demands to properly risk-manage the Indian rupee’s portfolio exposure, one of Asia’s key currencies, drove the SGX INR/USD futures volume up to a staggering 1.14 million contracts within one month.

SGX’s July-September quarter numbers are rather impressive because of this FX climb. SGX’s aggregate FX trading volume has been recorded at US$383 billion. This is a record high for SGX, and can only strengthen their positions in the Asian FX futures market.

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