The recent removal of strict health policies by China has led to an increase in risk appetite for the renminbi, resulting in strong demand for Asian foreign exchange (FX) at the stock market, according to Singapore Exchange (SGX). SGX reported a 42% YoY increase in the total volume of futures traded in FX in January, reaching 2.7 million contracts. A 55% YoY increase in volume on SGX was a major factor in this increase.
Over-The-Counter FX Sees Growth
ADV of over-the-counter (OTC) FX climbed 18% YoY to reach around US$80 billion in January, putting it on track to hit a medium-term target of US$100 billion.
SGX Outperforms in Securities Turnover
In terms of securities turnover, SGX outperformed as the securities daily average value (SDAV) rose 24% MoM in January to reach $1.2 billion. Also, the total market turnover grew by 12% MoM to $22 billion, which was faster than the growth in most Southeast Asian markets.
Rebound in Activity Across All Segments
Turnover increased across all segments, with Straits Times Index (STI) constituent stocks and real-estate investment trusts leading the way as activity rebounded from the end of the year. The benchmark STI advanced 3.5% in January, closing at its highest level since April 2022 at 3,365.67.
Technology Industry Leads Global Stock Market
In January, the internet and semiconductor industries led the stock market around the world. In the Lion City, the technology industry saw the most net funds come in.
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The recent shift in policy by China has resulted in a boost in risk appetite for the renminbi, leading to an increase in demand for Asian foreign exchange. SGX reported strong growth in OTC FX and securities turnover, outpacing most Southeast Asian markets. The global stock market was led by the technology industry, which shows that this sector is growing and has a lot of investment potential.
