SGX’s stellar derivatives market under threat as China A50 Index futures bag lion’s share of deals

It’s responsible for almost half of all derivatives contracts in March.

The Singapore Exchange saw a stellar growth in derivatives in March, but analysts warn that the dominance of its star China A50 Index futures has put the business in a vulnerable state.

“On closer look, the FTSE China A50 Index futures dominate as much as 50% of the total volume of derivative contracts traded on the SGX. This tipping of the balance puts the business in a slightly vulnerable situation, especially when rumours are circulating in the market place that the HKEx themselves are considering their own China A50 Index Futures product,” stated Nicholas Teo of CMC Markets.

SGX reported that derivatives average daily trading volume increased by 46% year-on-year to 678,126 contracts and up 15% month-on-month in March.

Total derivatives volume in March was 14.8 million contracts, up 56% year-on-year and 52% month-on-month.
 

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