The new entrant to the commodity derivatives scene – Singapore Mercantile Exchange has had record trading during the first quarter of 2012. The exchange boasts daily volume of $1 billion with over 13,000 contracts going through the exchange.
Singapore has a free economy and since the 90’s has positioned itself as the financial hub of Asia. Financial Technologies the firm behind the SMX believe Singapore will maintain its position as the regional leader in financial products and thus the SMX will play a key role for commodity trading.
SMX has grown over 20-fold compared to the same period last year. From a mere volume of 37,088 contracts traded in the first quarter of 2011, the Exchange’s trading volume rose to 867,249 contracts for the corresponding period in 2012.
Product innovation has facilitated SMX in achieving growth across its various categories of products. SMX witnessed growth especially in its launch of uniquely designed contracts in base metals, agriculture commodities and indices categories – Copper, Black Pepper and Iron Ore Index, as well as from contracts such as Gold and Euro-USD where contract specifications and trading hours had been refined.
These new products and revised contracts constitute a major share of more than 75% in SMX’s overall volumes with a turnover close to USD One trillion. Since its launch in Feb’12, the Black Pepper contract has already traded over 45,000 MT. The Copper contracts achieved a turnover of over 2,000,000 MT constituting about one fifth of the traded volumes during the last nine months, while the Iron Ore index contracts witnessed volumes of 8,520,400 tons in the same period.
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Financial Technologies founder Jignesh Shah is one of India’s richest men, FT is behind many successful projects including MCX, GBOT, DGCX and SMX.
The SMX provides traders Gold and Euro Dollar contract, with Gold reaching new highs Asian traders have been attracted to the safe haven metal.
Volumes in Gold and Euro-USD contracts grew by 26 times and 18 times respectively in the first quarter of 2012, compared to the corresponding period last year with only 321 and 29,198 contracts.
The SMX Jun12 Gold contract is currently trading at 1654.40.
Citi Bank has become clearing member for the exchange, SMX believes Citi’s vast reach can benefit SMX’s expansion and development.
Forexmagnates team have written a detailed report on the state of FX in Singapore, the history, the market, the numbers and how to do business. Available in the next quarterly report.