SGX to launch two international Reit futures - first such in Asia

The Singapore Exchange Centre in Shenton Way. PHOTO: ST FILE

SINGAPORE (THE BUSINESS TIMES) - The Singapore Exchange (SGX) is set to launch two international real estate investment trust (Reit) futures products, based on indices tracking Reits listed in Singapore, Hong Kong, Malaysia and Thailand. These products will be the first international Reit futures in Asia.

On Aug 24, SGX will launch the SGX FTSE EPRA Nareit Asia ex-Japan Index Futures, as well as the SGX iEdge S-REIT Leaders Index Futures, the bourse said in a Tuesday (Aug 4) press release after market close.

The FTSE EPRA Nareit Global Real Estate Index series is a widely-followed global benchmark, with about US$340 billion of assets actively benchmarked against or passively tracking the indices. The iEdge S-REIT Leaders Index is the most liquid index-basket representation of the S-Reit market.

Both futures are designed in accordance with Commodity Futures Trading Commission guidelines, which would enable distribution to US and global institutional investors.

The launch of these Reit futures comes amid rising global investor demand for real estate-related investment products and trading solutions. It also "builds on the forte" of the local stock market, following the launch of Singapore Single Stock Futures in June, SGX said.

Michael Syn, head of equities at SGX, said in the press release that the bourse continues to focus on innovative products that capitalise on its cash equities and equity derivatives businesses.

"Singapore is the Reits growth capital of Asia, attracting global institutional investors looking for defensive returns, particularly in today's volatile markets and low interest rate environment. Over the past 18 years since the first Reit listing on SGX, we have established a strong Reit ecosystem with increasing investor interest, deep liquidity and active issuer participation," Mr Syn added.

Last year, close to 45 per cent of Reit initial public offerings worldwide debuted on SGX. Singapore is the largest Reit market in Asia excluding Japan, with 44 Reits and property trusts of a combined market capitalisation of $98 billion.

Shares of SGX closed at $8.73 on Tuesday, up 2.59 per cent, before the announcement.

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