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Singapore Exchange (SGX Group) today released its market statistics for April 2023. Uncertainties over the path for global interest rates slowed activity in a shortened trading month, alongside mixed sentiments on the impact of China’s reopening on domestic consumption.

Derivatives traded volume was down 15% year-on-year (y-o-y) in April at 17.7 million contracts, as strong gains in commodities activity were countered by reduced trading in equities and foreign exchange (FX).

Iron ore financialisation accelerates

Commodity derivatives traded volume rose 55% y-o-y in April to 3.3 million contracts, led by a 63% y-o-y increase in benchmark iron ore volume. Screen trading contributed 51% of total futures volume during the month, up from about 45% through the first quarter, continuing a trend of growing adoption from financial participants. On a daily average volume (DAV) basis, screen volume climbed to almost 65,000 lots – a record high.

Freight derivatives traded volume also gained in April, as the unique SGX Commodities offering enables institutional investors to risk-manage both cargo and freight on a single liquid and capital-efficient platform. Forward freight agreement (FFA) volume rose 6% y-o-y to 133,582 contracts. Petrochemicals volume jumped 140% y-o-y, while the volume of SGX SICOM rubber futures, the global pricing bellwether for natural rubber, increased 45% y-o-y.

Higher notional FX volume

In FX, market participants paused to reflect on the outlook for interest rates as well as the impasse over the U.S. debt ceiling. Total futures traded volume on SGX FX slid 13% y-o-y in April to about 2.5 million contracts. However, in notional terms, volume climbed 4.3% y-o-y to US$172.9 billion, while month-end open interest gained 2.4% y-o-y to US$14.1 billion.

SGX USD/CNH Futures traded volume rose 23% y-o-y in April to almost 1.5 million contracts, as news flow on the pace of China’s growth spurred portfolio hedging demand. The contract is the world’s most widely traded international renminbi futures.

A50 open interest expands

Asian equities trading was rangebound in April, as participants took stock following the turmoil in the U.S. banking sector. On SGX Equity Derivatives, equity index futures traded volume was 24% lower y-o-y at 11.4 million contracts.

While SGX FTSE China A50 Futures volume declined 27% y-o-y in April to 6.7 million contracts, open interest increased 6% y-o-y amid mixed economic signals and uncertainties over U.S.-China relations. The contract is the world’s most liquid international futures contract for Chinese equities.

Resilient Singapore market

Securities daily average value (SDAV) was down 19% m-o-m in April at S$979 million, as trading activity consolidated following heightened volatility in March, when both the benchmark Straits Times Index (STI) and MSCI Singapore Index rebalanced.

The Singapore stock market remained resilient, with the STI climbing 0.4% m-o-m in April to 3,270.51. The STI ended the month with a 1.3% total return, bringing its tally for the first four months of 2023 to 2.1%.

Secondary fundraising on SGX Securities almost doubled y-o-y in April to S$544.9 million as SGX-listed companies continued to tap the equity capital markets.

On SGX Fixed Income, Asia’s leading international bond marketplace, the amount issued from 41 new bond listings stood at S$16.6 billion in April, steady from the previous month. Highlights included CK Hutchison International Ltd.’s US$2.5 billion dual-tranche senior notes, SK Hynix Inc.’s US$1.7 billion convertible bonds, Korea National Oil Corporation’s US$1 billion dual-tranche senior notes and Sumitomo Mitsui Trust Bank Ltd.’s EUR500 million three-year covered bonds.