SGX ASEAN-5 Futures Trading Grows Amid Surging Interest on ASEAN Economies

Recent economic reforms and stimulus have drawn attention to the Southeast Asian region.

Singapore Exchange (SGX) today issued a market update revealing that SGX ASEAN-5 Futures Trading is continuing to experience growth amid increasing interest on Southeast Asian (ASEAN) economies.

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Economic Reforms and Stimulus

SGX has reported seeing a number of monetary and fiscal policy changes within the world’s leading economies, including fiscal stimulus in Japan and interest rate cuts from the Bank of England. ASEAN markets saw a continuation of economic and political policies with recent economic reforms and stimulus in Indonesia, Malaysia and Thailand drawing attention to the region.

ASEAN Economies Remain Resilient

In the latest Word Economic Outlook (WEO) update, the IMF revised downwards its advanced economies growth forecast as a region from its April forecast by 0.1 percent, while its growth forecast for emerging markets and developing economies remained unchanged. In particular, 2016 growth forecasts for the US, UK and Japan (part of the advanced economies) and India (part of the emerging market economies) were all reduced by 0.1 percent. 

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China, the other major emerging market, was adjusted upwards while forecasts for the ASEAN-5 economies remained unchanged.

As of 16 August 2016, year-to-date (YTD) returns of ASEAN indices were the highest amongst major Asian indices. MSCI Thailand Index, MSCI Indonesia Index and MSCI Philippines Index were noted as standout performers.

Since the start of the year, there has been a relative strengthening of major Asian currencies versus the USD. All currencies except the Chinese yuan have appreciated and the outlook is in favour of further strengthening given ongoing uncertainties around the Fed’s monetary policy decisions.

SGX ASEAN-5 Futures Gain Traction

SGX is the only exchange in Asia that provides a complete suite of futures contracts on ASEAN5 indices. Over the May to July period this year, the volume of SGX ASEAN-5 futures grew by 8 percent compared to trading during February to April. The average open interest during the same corresponding period rose by 10 percent, indicating a stronger demand for SGX ASEAN-5 futures.

SGX ASEAN-5 futures are available for trading in both T and T+1 sessions to hedge against volatility during Asian, European and partial US time zones.

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