SINGAPORE (THE BUSINESS TIMES) - The market turnover value of exchange-traded funds (ETFs) on the Singapore bourse surged to $469 million last month, up 140 per cent from the year-ago period, on the back of strong investment interest and capital inflow to Asia.

Meanwhile, the total securities market turnover value rose 35 per cent on the year to $29.6 billion in April, while the securities daily average value, or SDAV, grew by 35 per cent to $1.41 billion, according to the Singapore Exchange's (SGX) latest monthly market statistics report.

"Global equities stabilised on early signs of market optimism, following the intense volatility in the first quarter," SGX said on Monday (May 11).

The traded volume of equity index futures on the SGX fell 25 per cent from a year ago to 12.3 million contracts in April. "The anticipated gradual reopening of the Chinese economy and optimism for more economic stimulus eased portfolio-hedging activity," the bourse operator said. Last month, China became the first major economy to exit its coronavirus lockdown, even as it announced a contraction in its gross domestic product for the first quarter of the year.

SGX Nifty 50 Index Futures' traded volume gained 24 per cent to 1.9 million contracts, while the SGX Nikkei 224 Index Futures climbed 18 per cent to nearly 1.8 million contracts.

"Significantly, for the benchmark Japanese contract, volume surged 60 per cent year on year in the T+1 overnight session, underscoring demand for continuous price formation and round-the-clock risk management from investors in the US and European time zones," SGX noted.

As for foreign exchange (FX) futures, demand for currency risk management continued to grow.

The total volume of FX futures that changed hands on the exchange increased by 13 per cent year on year to 1.7 million contracts in April.

Volume traded for SGX's USD/CNH (US dollar and offshore Chinese yuan) futures rose 14 per cent to 679,239 contracts, while month-end open interest jumped 57 per cent on the year to a notional U$6.27 billion. "Market participants noted an uptick in geopolitical tensions between China and the US, which in January signed what was billed as the first phase of a broader trade deal," the bourse operator said.

SGX's INR/USD (Indian rupee and US dollar) futures saw their total traded volume increase by 9 per cent on the year to 980,379 contracts last month, despite reduced volatility in India's currency as the government extended a nationwide lockdown.

In commodities, disruptions in the physical market - particularly in global supply chains - continued to drive demand for risk-management solutions, although trading volumes moderated off the highs of March.

The total commodity derivatives volume on SGX shrank by 9 per cent from the year-ago period to 1.7 million contracts in April, with the exchange's bellwether iron ore derivatives declining 8 per cent to about 1.5 million contracts and Singapore Commodity Exchange rubber futures tumbling 17 per cent to 149,963 contracts.

During the month, prices of West Texas Intermediate crude futures sank below zero for the first time, fuelling volatility across the energy complex and downstream petrochemical markets. SGX's petrochemicals volumes were up 8 per cent in April to 2,492 contracts.

Meanwhile, open interest in paraxylene and benzene derivatives, as well as coking coal futures and freight options, climbed to record highs, which indicates higher demand for price risk management, SGX said.

Shares of SGX were up $0.12 or 1.2 per cent to trade at $9.93 as at 2.23pm on Monday.