SGX Sees Jumps in Derivative Markets as STI Shrinks -1.5%

The Singapore Exchange (SGX), an investment holding company located in Singapore, recorded increases across various derivatives products on its exchange in April.

Total traded derivative contracts on the platform rose by 19% year-on-year (YoY) to 20.8 million contracts.

In contrast, the derivatives daily average volume (DAV) leapt 25% year-on-year (YoY) to 1.1 million contracts in April.

This is according to the market statistics for April 2022 released by the exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term on Thursday.

SGX’s derivatives DAV soared to 1.06 million contracts in February, reaching a peak not seen since March 2020.

The Ukraine-Russia crisis added volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term to the derivatives’ volumes across the board.

While the equity index futures volume climbed by 23% YoY to 15.1 million contracts, FX futures volume rose higher by 27% YoY to 2.8 million contracts.

However, SGX saw a bigger 34% jump in FX futures volumes in March when it hit 2.8 million contracts.

Again, the conflict between Russia and Ukraine boosted hedging activity across the FX market.

While the USD/CNH futures traded volume gained 48% MoM in March, the INR/USD futures volume spiked by almost 22%.

STI Slides

The Straits Times Index (STI), a market capitalization-weighted index that tracks the performance of the top 30 companies listed on SGX, slid -2% MoM to 3,356.9.

This is even as the securities daily average value (SDAV) fell -1% YoY in April to S$1.3 billion.

The STI has fallen even further since, tumbling -1.9% or 60.89 points to close at 3,165.18 on Thursday.

The fall is part of a decline in Asian markets which tumbled on inflation fears following the release of US consumer price index (CPI) data.

“The much-awaited US CPI data revealed the first deceleration in consumer prices in 8 months. But, with the descent coming in slower than expected, it has kept the US equity markets on edge,” IG market strategist, Yeap Jun Rong, told The Business Times, a Singaporean financial daily.