TOTAL securities turnover on the Singapore Exchange : S68 -0.32% (SGX) in September gained 6 per cent from the previous month to S$25.8 billion while the total market turnover volume fell to 28.8 billion shares compared to 31.6 billion shares in August. 

 

Year on year, total securities turnover shed 5 per cent. Total market turnover volume likewise dropped 23 per cent from 37.4 billion shares. 

 

In SGX&rsquo s monthly market statistics report released on Tuesday (Oct 11), the bourse operator attributed the rise in securities market turnover value to the strong performance of Straits Times Index (STI) constituent stocks and real estate investment trusts (Reits). 

 

SGX said that STI&rsquo s constituent stocks saw over S$300 million in net institutional flows, with the largest inflows to DBS, OCBC Bank and Singtel. Dual-listed liquor company Emperador, which debuted on SGX Securities with a secondary listing in July, was recently included as an STI constituent.

 

While the benchmark STI declined 2.8 per cent to 3,130.24 in September, overall it has advanced 1 per cent in the year to date - outperforming the FTSE All-World Index. SGX also noted that the STI is also the only developed market gauge to yield positive returns. 

 

The average securities clearing fee for the July-to-September quarter was 2.58 basis points.

 

Securities daily average value (SDAV) stood at S$1.2 billion in September, 5 per cent lower year on year but 6 per cent higher on the month. This came as securities average daily volume declined 23 per cent year on year, and 8.8 per cent month on month, to 1.3 billion securities.

 

Derivatives activity also saw an all-time high in September. Derivatives daily average volume (DDAV) rose 14 per cent month on month in September to 1.05 million contracts, achieving a single-day record of 2.97 million contracts on 27 September.

 

The market turnover value of exchange-traded funds (ETFs) gained 25 per cent month on month in September to S$315 million, supported by fixed income and commodity ETFs, while turnover of structured warrants and daily leverage certificates (DLC) was up 7 per cent on-month at S$652 million.

 

This month also saw the introduction of CSOP CGS-CIMB FTSE Asia Pacific Low Carbon Index ETF, the world&rsquo s first low-carbon ETF, as an SGX listing. This brought total global assets under management of sustainability-linked ETFs on SGX to more than S$1 billion.

 

On SGX Fixed Income, Asia&rsquo s leading international bond marketplace, the amount issued from 100 new bond listings stood at S$26.2 billion in September, or almost S$78 billion for the July-to-September quarter.

 

SGX also said that September was a record month for foreign exchange (FX) futures. Futures traded volume on SGX FX rose 31 per cent month on month in September to 3.4 million contracts &ndash an all-time high &ndash with total notional traded value in excess of US$205 billion.

 

Meanwhile, total commodities traded volume climbed 23 per cent year on year in September to 3 million contracts. Benchmark iron ore derivatives volume rose 24 per cent year on year in September to 2.61 million contracts, while trading velocity also increased for shipping derivatives, with forward freight agreements volume up 9 per cent month on month at 173,931 contracts.

 

SINGAPORE Exchange (SGX) must look beyond equity assets and focus on areas where it can be competitive, said SGX chairman Kwa Chong Seng.

 

Responding to questions at SGX&rsquo s annual general meeting on Thursday (Oct 6), Kwa said the bourse operator is unlikely to be able to compete with players such as the US exchanges for company listings given that Singapore is a &ldquo very small market&rdquo .

 

&ldquo We need to focus on where we can beat them, and not fight on areas where we can&rsquo t,&rdquo he said.

 

While SGX still welcomes small and medium-sized enterprises (SMEs) for financing, Kwa said the bourse operator is also focusing on other areas &ndash such as foreign currencies and commodities &ndash where it sees a competitive edge.

 

&ldquo Do we want to spend all our lives on SMEs listing? We really want to be an international exchange&hellip Our role is not to save the SMEs,&rdquo Kwa said. He noted that even in the region, it is difficult to attract quality listings as the countries would prefer their companies list on their local bourses.

 

SGX chief executive Loh Boon Chye said the bourse operator had continued to diversify its product offerings and collaborated with different regions and countries during the financial year. For instance, SGX partnered the New Zealand Exchange to offer dairy derivatives.

 

For the full year ended Jun 30, SGX recorded an increase of 1.3 per cent in its net profit to S$451.4 million. Its revenue rose 4 per cent to S$1.1 billion.

 

Operating profit for its equities segment fell 2.6 per cent to S$405.2 million. But its fixed income, currencies and commodities segment jumped 29.8 per cent to S$53.1 million, while its data, connectivity and indices segment grew 7.3 per cent to S$79.2 million.

 

Loh said SGX&rsquo s derivatives platform saw high volumes across all asset classes in FY2022, and expects its over-the-counter foreign exchange business to achieve an average daily volume of US$100 billion in the medium term.

 

&ldquo It&rsquo s important to note that competition is not at the expense of collaboration,&rdquo Loh said in response to concerns about whether competitors will be willing to collaborate in hopes of further growth. Instead, collaborations can be a &ldquo win-win situation&rdquo for both partners.

 

Loh said the bourse operator&rsquo s focus is to realise its exchange partnerships and extend its engagement with end clients, digitalise financial markets, as well as work on sustainable investing efforts.

 

Kwa added that the bourse operator is &ldquo building for the future&rdquo with its investments, and asked shareholders to support its business transformation to be a global exchange.

 

&ldquo I will rather have a market that is more focused on long-term investments than on people trading,&rdquo Kwa said. &ldquo We are not a casino.&rdquo

 

THE combined assets under management (AUM) of the 5 Reit exchange-traded funds (ETFs) listed on the SGX : S68 -0.63% has doubled in 2 years, from S$455 million in August 2020 to S$901 million in mid-September 2022. At over S$900 million, S-Reit ETFs represent more than half the S$1.7 billion combined AUM of Reit ETFs in Asia-Pacific ex-Japan globally.

 

The 5 Reit ETFs listed in Singapore (in order of AUM size) are NikkoAM-StraitsTrading Asia Ex Japan Reit ETF, Lion-Phillip S-Reit ETF, UOB Asia-Pacific Green Reit ETF, CSOP iEdge S-Reit Leaders ETF, and Phillip SGX APAC Dividend Leaders Reit ETF.

 

Retail investors have been a key driver in the locally-listed Reit ETFs for the past year, accounting for 44 per cent of Reit ETF holdings. Institutional investors make up the other 56 per cent of Reit ETF holdings. Retail investors bought over S$1 billion worth of S-Reits in 2021 and continued to deploy funds into the sector, with net inflows exceeding S$930 million in mid-September 2022. Net buy/sell amount is derived by subtracting total sell amount from total buy amount.

 

Despite generating average total returns of -6.8 per cent in the first 8 months of 2022, the 5 Reit ETFs recorded net inflows of S$163 million in the year to date thus far. The Lion-Phillip S-Reit ETF has been the best performer over the first 8 months of 2022 with total returns of -3.53 per cent and has the highest dividend yield of 5.04 per cent. During the same period, the FTSE EPRA Nareit Developed Index (a benchmark for global Reits) posted a price decline of 18.5 per cent.

 

After Lion-Phillip S-Reit ETF, the CSOP iEdge S-Reit Leaders ETF was the second-highest yielding Reit ETF with a dividend yield of 4.97 per cent, followed by the NikkoAM-StraitsTrading Asia Ex Japan Reit ETF at 4.92 per cent.

 

The NikkoAM-StraitsTrading Asia ex-Japan Reit ETF and Lion-Phillip S-Reit ETF are among the top 10 ETFs listed on SGX by trading turnover and by net inflows.

 

Reit ETFs provide investors instant diversification across various sub-sectors and geographical regions at lower execution costs as opposed to building a similar portfolio through investing in individual Reits. Aside from direct cash investments, retail investors may also invest in Singapore-listed Reit ETFs via the Supplementary Retirement Scheme (SRS) and the CPF investment scheme (CPFIS).

 

TOTAL securities turnover on the Singapore Exchange : S68 +0.84% (SGX) dropped 7 per cent on the year to S$24.3 billion in August, although total market turnover volume edged up 1 per cent to 31.6 billion securities.

 

Month on month, the total market turnover value was 35 per cent higher, while the total market turnover volume jumped 54.6 per cent from July, according to SGX&rsquo s monthly market statistics report released on Monday (Sep 12).

 

The bourse operator attributed the broad pickup in securities market turnover to corporate earnings season and strong month-end rebalancing. 

 

&ldquo Institutional portfolio rotation led to an estimated S$750 million in net institutional inflows in August, the highest since January and mainly into the financials and consumer sectors,&rdquo SGX added. 

 

Securities daily average value stood at S$1.1 billion in August, 12 per cent lower year on year but 22.6 per cent higher on the month. This came as securities daily average volume slid 4 per cent year on year to 1.4 billion securities, but rose 40.5 per cent month on month.

 

The benchmark Straits Times Index rose 5 per cent on the year to 3,221.67, and was 0.3 per cent higher month on month. SGX noted that the index generated a year-to-date price return of 3.1 per cent and outperformed the FTSE All-World Index.

The market turnover value of exchange-traded funds was S$252 million in August, 45 per cent lower year on year and down 25 per cent month on month. Volume dropped 31 per cent on the year to 139 million securities and was down 22.3 per cent on the month.

 

Increased risk-management activity drove derivatives volumes to reach 20.4 million contracts amid ongoing uncertainty. This was 4 per cent higher than the year-ago period but 0.5 per cent lower month on month. Meanwhile, derivatives daily average volume was up 2 per cent on the year to 921,170 contracts, but 6.6 per cent lower on the month.

 

Notably, the market turnover value of daily leverage certificates surged 120 per cent on the year to S$351 million in August, and was up 36.6 per cent on the month. This came as volume jumped 97 per cent year on year and 33.4 per cent month on month.

 

The market turnover value of structured warrants, meanwhile, slipped 44 per cent year on year to S$258 million and was down 3 per cent on the month. Turnover volume was 28 per cent lower on the year but 6.1 per cent higher month on month.