Forex futures traded on the Singapore Exchange (SGX), Asia's leading securities and derivatives market operator, surged to an “all-time high” of 4 million contracts in November. This represents a 21% jump month-on-month (MoM) and a 104% increase year-over-year (YoY) from the 3.3 million contracts traded in October.
With the new figures, which are contained in the SGX Group market statistics for November 2022 published on Monday, the exchange operator has surpassed its record 3.42 million contracts posted earlier in September.
According to the SGX Group, hedging activity on the SGX FX, its over-the-counter (OTC) forex futures marketplace, shot up last month as the United States’ interest rate trend weakened the dollar. This is even as the volume of the SGX INR/USD futures improved 20% MoM and 81% YoY to 1.8 million contracts, which is up from 1.5 million contracts in October.
Furthermore, the SGX INR/USD futures posted a record average daily turnover of 83,700 contracts in November. In addition, the KRW/USD futures hit “a new monthly high” worth a notional value of US$3.3 billion.
“Record foreign exchange (FX) trading activity drove derivatives volume, amid optimism on Asian economies and signs that the U.S. Federal Reserve will slow its pace of interest-rate hikes,” SGX Group explained.
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8-Month High Derivatives Volume
Meanwhile, the total derivatives across equity, forex and commodities traded on SGX in November shot up 8% MoM and 30% YoY to 23.7 million contracts, which is up from 22 million in the prior month. On the contrary, while the derivatives daily average volume (DDAV) dropped -8% to 1.1 million contracts, which is down from 1.2 million in the previous month, the volume climbed 27% year-on-year.
“China’s gradual reopening and expanded government support for the country’s property sector fanned risk-on sentiment in Asian equities, currencies as well as commodities, and SGX Group’s multi-asset offering enabled institutional investors to manage their portfolio risk,” SGX explained.
Meanwhile, Finance Magnates reported in August that SGX Group’s OTC FX revenue rose 47% to S$58.4 million at the end of its fiscal year 2022. In addition, the Group’s total revenue increased by 4% to S$1.1 billion, with a net profit reaching S$456 million during the period.
The SGX Group includes subsidiaries such as the Baltic Exchange, BidFX, MaxxTrader, Climate Impact X and Energy Market Company, among others.
