SGX trading activity picks up sharply in September

SINGAPORE – The Singapore Exchange (SGX) may be about to shed its drab reputation if the latest numbers from the bourse are anything to go by.

The data, released on Oct 9, showed securities trading activity on the SGX hit its highest levels since May 2022 in September, driven by portfolio realignment and buying by institutional and retail investors.

Lower interest rates and increasing optimism over the global economy also helped to boost investor sentiment.

Securities market turnover, or the total value of all securities transactions on SGX, jumped 75 per cent year on year in September to $30.4 billion, while securities daily average value (SDAV) surged 67 per cent year on year to $1.45 billion.

Both levels were at their highest since mid-2022. During the month, Singapore’s stock market was also the second most actively traded in the region.

For the July-to-September quarter, securities market turnover climbed 37 per cent to $86 billion from the same period in 2023, while SDAV increased 33 per cent year on year to $1.32 billion, the data showed.

SGX attributed the sharp uptick in market activity to easing monetary policies and China’s stimulus package, which fuelled optimism and portfolio repositioning.

“With China’s economic outlook still driving regional volatility, SGX Group remained the venue of choice for market participants managing Asia exposures,” it said.

The benchmark Straits Times Index (STI) outperformed its Asean peers, advancing 4.1 per cent month on month to 3,585.29 in September, bringing year-to-date gains to 10.6 per cent. The STI recorded a 17-year peak on Sept 23, while the STI Total Return Index achieved an all-time high. 

The volume of derivatives traded on SGX also rose. Derivatives traded volume logged single-day records over two consecutive days in September, reaching as high as 3.46 million contracts across equities, foreign exchange and commodities on Sept 25.

Derivatives traded volume spiked 34 per cent year on year in September to 28.9 million contracts, while derivatives daily average volume advanced 35 per cent year on year to 1.45 million contracts. Both measures hit their highest in four and a half years.

September also saw record assets under management (AUM) for

a landmark climate action exchange-traded fund (ETF)

launched in September 2023 to catalyse sustainable investing in Asia.

The AUM of the iShares MSCI Asia ex-Japan Climate Action ETF rose to US$556 million (S$725 million) during the month, the highest since the fund’s launch.

The AUM of real estate investment trust (Reit) ETFs surpassed $1 billion for the first time on the back of strong third-quarter capital inflows, mirroring a rally in the Singapore Reit sector.

Overall ETF turnover doubled year on year in September to $445 million and was up 65 per cent at $1.18 billion for the July-to-September quarter compared with the same period in 2023.

All this must come as good news to critics who have complained that the local bourse has been in a moribund state for much of the past decade, although some brokers are still cautious.

“September saw significant progress in major 2024 economic themes, such as Singapore’s trade and manufacturing recovery, the Fed funds rate cut and strategic stimulus for China’s economic recovery,” said SGX market strategist Geoff Howie.

Despite the improvement in trading activity, new listings have been few and far between on the local bourse in 2024.

While there has been no mainboard listing and only one Catalist listing since January, there have been nine delistings during the period.

The state of the bourse prompted the Monetary Authority of Singapore (MAS) to form a review group to strengthen equity market development in August.

Led by Minister for Transport, Second Minister for Finance and deputy chairman of the MAS Chee Hong Tat, the group has 12 months to recommend measures to strengthen and grow the equities market here.

The latest numbers suggest the market may already be waking up.