SINGAPORE: Singapore Exchange (SGX) released its market statistics for May 2020. The reopening of economies around the world lifted sentiment in equity markets, even as the COVID-19 pandemic continue to cloud the outlook for global growth. The exchange’s derivatives franchise gained amid increased portfolio demand in foreign exchange (FX) and commodities.

Securities daily average value (SDAV) on SGX rose 37% year-on-year (y-o-y) in May to S$1.51 billion, while total securities market turnover value climbed 17% y-o-y to S$27.2 billion.

The market turnover value of exchange-traded funds (ETF) jumped 73% y-o-y to S$302 million, as the SPDR Straits Times Index ETF traded nearly three times higher y-o-y at S$88 million on the back of S$57 million in net inflows during the month. The increases in market turnover, as well as reduced volatility, were driven in part by optimism from economic stimulus as more countries emerge from lockdown.

With calmer Asian equity markets, institutional investors sought to reposition their portfolios to capture potential growth opportunities. SGX FTSE China A50 Index Futures traded volume gained 2% month-on-month (m-o-m) in May to 6.11 million contracts, while SGX Nifty 50 Index Futures increased 3% m-o-m to 2 million contracts.

The total amount issued from debt securities listings on SGX rose 25% y-o-y in May to S$16.59 billion, mainly supported by issuances from North Asia. Indonesian bond issuers led by Hutama Karya, Bank Mandiri and Indonesia Asahan Aluminium continued to tap the bond market, while Yageo Corporation from Taiwan also listed its convertible bond.

Geopolitical tensions between the U.S. and China ratcheted higher during the month, driving risk management in currencies. Total FX futures traded volume on SGX, Asia’s largest FX futures marketplace, increased 17% m-o-m in May to 2 million contracts. SGX USD/CNH futures traded volume gained 7% m-o-m to 724,127 contracts, with month-end open interest 16% higher m-o-m.

Continued uncertainty with India extending its nationwide lockdown spurred hedging in the rupee. SGX INR/USD futures traded volume surged 26% m-o-m in May to 1.24 million contracts, as month-end open interest climbed 13% m-o-m.

Commodities volume on SGX rebounded 25% m-o-m in May to 2.16 million contracts, boosted by a 30% m-o-m increase in the exchange’s benchmark iron ore derivatives to 1.93 million contracts. The exchange’s long-term efforts to grow the iron ore ecosystem is sustaining interest from financial participants, with more funds and asset managers interacting with physical-market participants – reinforcing iron ore’s position as Asia’s first truly global commodity. For the year-to-date through May, daily average volume from screen trades was up 39% compared with the same period in 2019.