UPDATE: SGX posts August commodity derivative volumes jumped 91 percent

Signage at the SGX building on Shenton Way in Singapore; taken October 2018.Signage at the SGX building on Shenton Way in Singapore; taken October 2018.

This article was originally published on Tuesday, 10 September 2019 at 8:48 A.M. SGT; it has since been updated to include more details.

Trading volume of commodity derivatives, including freight, petrochemicals and SICOM rubber contracts, surged 91 percent on-year in August to 2.74 million contracts as markets remained jittery, Singapore Exchange said in a statement Tuesday.

“Market participants continued to use SGX’s suite of risk-management tools to manage their positions across multiple asset classes as concerns over the outlook for both developed and emerging economies intensified,” SGX said.

“With ongoing U.S.-China trade tensions, a yield-curve inversion in the U.S. bond market – interpreted by some participants as a recession signal – as well as fresh uncertainties over Brexit, global growth concerns dominated the markets throughout August,” it added.

SGX iron ore derivative trading volume jumped 111 percent on-year in August to a record 2.48 million contracts after a slowdown in steel demand spurred the metal’s biggest one-month price drop since 2011, SGX said.

“Financialisation in iron ore through the use of futures contracts is gaining pace as more international market participants adopt the commodity as a macro barometer for Asia’s growth,” the statement said.

Foreign exchange derivatives were also active during the month, with total FX futures volume rising 59 percent on-year to 2.62 million contracts, SGX said.

With India’s rupee facing headwinds, SGX INR/USD futures trading volumes climbed 61 percent on-year to a record 1.6 million contracts for August, the statement said.

After the yuan weakened on stalled U.S.-China trade talks, with the U.S. dollar fetching more than 7 yuan, SGX USD/CNH futures volumes rose 50 percent on-year during the month to 965,241 contracts, SGX said.

Equity derivatives also saw increased interest, with equity-index derivatives volume rising 14 percent on-year to 16.7 million contracts, SGX said.

SGX added that in the cash equities market, the securities daily average value (SDAV) rose 12 percent on-month and increased 6 percent on-year in August to S$1.2 billion even as the benchmark Straits Times Index declined 5.9 percent on-month.

The securities daily average volume fell 27 percent on-year to 1.19 billion shares in August, the filing said.

Total market turnover by volume fell 30 percent on-year to 23.80 billion shares, while the value rose 1 percent on-year in August to S$23.75 billion, SGX said.

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