SGX

SGX - The latest gold venture by SGX is one of its many recent attempts to diversify from the sluggish traditional securities sector, while expanding deeper into the commodities and derivatives segment. However like any new asset class/ product, more time will be needed to determine the impact on bottomline. As a guide, SGX securities trading volume in Jun continued its slip, while derivatives and commodity activities grew, led by record volumes for SGX rubber futures and iron ore offerings. The total value of securities traded declined 37% y/y (-12% m/m) in Jun to $20.5b, with an average daily traded value of $978m (-40% y/y, -16% m/m). Derivatives volume declined to 8.6m contracts, down 20% y/y but 6% increase m/m, weighed by a 54% slump in contracts for Nikkei 225 Futures, partially offset by a rise in volume from China A50 Futures (+32% y/y, +15% m/m) and India Nifty Futures (+6% y/y, -13% m/m). Commodities outperformed, led by record volume of iron ore swaps, futures and options, up 126% y/y (+4% m/m) to a record of 268,840 contracts and further boosted by a 54% y/y (+22% m/m) surge in rubber futures to 40,679 contracts. SGX continues to focus on a series of transformative initiatives in the securities market, which include new product launches, international distribution and to strengthen its regulatory and risk management capabilities. Investors could also expect SGX to be on the lookout for further tie-ups and JVs in the commodities and derivatives segment, as it attempts to diversify from its traditional securities business and increase its product offering.