Singapore Exchange’s (SGX) two new renminbi-denominated futures, USD/CNH futures and CNY/USD futures which were launched on October 20 have taken off to a bright start after seeing 1,836 transactions on the first day, which equates to around $180m.
A senior source at DBS Bank told SRP that the futures contract have been designed to serve as a hedging tool to businesses with foreign operations and exposure to CNH or CNY movement. “It will also provide an efficient building block for manufacturing of structured products,” he said.
Market-makers and key participants trading the new futures contracts include Bank of China Singapore Branch, DBS Bank, ICBC's Singapore Branch, Quantrun Investment Management and Virtu Financial. They have deposited over RMB1bn ($180m) with SGX as margin collateral.
According to Guo Ning Ning, general manager at Bank of China Singapore Branch, BOC will continue to leverage on its renminbi business and facilitate access in renminbi futures to global investors.
“This contract provides a tool to manage FX risk and increase trading opportunities around China related products,” said Darren Wong, chief executive at Quantrun Investment Management. “We believe Singapore to be the major offshore centre for renminbi and we will continue to participate in this market.”
SGX is also planning to launch a new series of futures-based indices - SGX Access Asia Indices – which will be targeted at structured product issuers seeking to gain exposure to indices with higher liquidity.
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