The Singapore Exchange (SGX) experienced record-breaking foreign exchange (FX) futures trading volumes in August, spurred by heightened market volatility and increased hedging activities, according to the exchange’s latest report.
FX Futures Trading Hits New Highs at SGX
SGX saw a remarkable 33% year-over-year (YoY) surge in total FX futures volumes, reaching an all-time high of 5.6 million contracts. The exchange’s leading USD/CNH FX futures also witnessed a significant jump, with trading volume rising 25% compared to August of last year, totaling 3.4 million contracts.
Both retail and institutional investors were highly active during this period. Retail investors netted purchases worth S$685 million, the highest in 10 months, while institutional investors increased their activity across a variety of stock segments.
Broader Market Trends Reflect Increased FX Activity
SGX’s record-breaking numbers align with data from other trading venues, which also reported heightened activity in the FX market during August. FXSpotStream, for instance, recorded an average daily volume of nearly $97 billion, reflecting a 60% rise compared to the same month in 2023. Meanwhile, Cboe’s spot currency volumes increased to $1.1 trillion, a notable uptick from July’s $1.02 trillion.
Global FX markets have been influenced by fluctuations in key currencies, including a weaker U.S. dollar and a volatile Japanese yen. Despite having fewer trading days in August (22 compared to 23 in July), SGX’s Average Daily Volume Count (ADVC) increased from $44 billion to nearly $50 billion.
SGX Securities and Commodities Markets Also Thrive
The volatility not only impacted FX futures but also boosted SGX’s securities market activity. The total turnover value in securities rose 22% YoY, reaching S$28.8 billion, the highest since March 2022. The daily average value of securities traded (SDAV) climbed 28%, averaging S$1.4 billion.
SGX’s commodities market also experienced substantial growth, with total derivatives volume increasing 20% YoY to 6.1 million contracts. Notably, petrochemicals trading surged 91% to a record 2.35 million metric tonnes, driven by heightened hedging demand.
Furthermore, SGX’s newly launched three-month Tokyo Overnight Average Rate (TONA) Futures, introduced in late July, gained significant traction, with 37,090 contracts traded in August.
Mixed Performance for Singapore’s Stock Index
Despite the overall rise in trading activity, Singapore’s benchmark Straits Times Index (STI) saw a slight dip of 0.4% month-on-month, closing at 3,442.93. However, the index remains up by 6.7% for the year.
