Singapore Exchange (SGX) today brings Asian markets closer to global investors with the launch of hubs in Chicago and London.
The hubs are the first by an Asian exchange and will provide customers with convenient and cost-effective local connections to SGX markets.
SGX expects to begin operating the hubs once pre-trade risk controls at the exchange level in the derivatives market are made available to participants in April. The pre-trade risk controls are in line with the Futures Industry Association's recommendation for exchange-hosted risk controls.
By connecting to SGX's hubs, global investors can access the world's biggest offshore market for Asian equity futures. These include the China A50 futures, the only offshore futures for China's domestic A-share market.
In addition to the hubs, SGX is also pursuing alliances with suitable partners to enable Asian investors to easily participate in global markets.
The international hubs are part of SGX's S$250 million technology initiative to deliver the best access to fast-growing Asian economies. Other components of the initiative are a world-class Singapore data centre with co-location services and the world's fastest trading engine Reach.
"Customers coming to SGX's hubs can access Asia's biggest and most promising economies at lower cost and greater convenience. Our trading community will benefit from increased opportunities and greater liquidity as we continue to grow our presence in more international financial centres," said SGX CEO Mr Magnus Bocker. SGX is exploring Hong Kong and Tokyo as the next locations for its hubs.
Separately, Singapore Exchange (SGX) and Eurex today announced a partnership to deliver convenient market access and cost efficiencies to members of both exchanges. Both companies plan to link their co-location data centers to provide market participants easy connectivity to each other's markets in Singapore and Frankfurt/Main respectively.
As part of this partnership, Eurex will be moving its existing access point in Singapore into the SGX co-location data center. In return, Eurex will act as a network service provider to SGX's customers in Europe. This initiative is expected to be implemented mid-2012.
When the link becomes operational, customers of each exchange can more easily and cost effectively access both markets by connecting their trade-execution systems to either the SGX or Eurex co-location data centers. Trade matching will still be executed at the respective home exchanges.
Eurex's co-location customers in Frankfurt can conveniently participate in Asia's biggest and most dynamic economies and companies via SGX's securities and derivatives markets. Similarly, SGX's co-location customers will be able to access Eurex's diversified derivatives market if they are Eurex trading members.
"Today's collaboration is part of our Asian strategy and will lower the connectivity costs for our Asian customers while improving our footprint in a growth region," said Juerg Spillmann, member of the Eurex Executive Board.
"We are pleased to partner with Eurex to grow our distribution network. As part of our strategy to reach out to global liquidity pools, this collaboration will offer enhanced market access to SGX, thus further establishing ourselves as the Asian gateway," said SGX President, Gan Seow Ann.
Separately, Singapore Exchange (SGX) is adding the MSCI Indonesia Index Futures to its suite of Asian equity index derivatives in the second quarter of this year.
The new contract is based on the MSCI Indonesia Index, which measures the performance of the largest and most tradable stocks listed on the Indonesian equity market. It is a widely followed Indonesian benchmark for institutional investors.
Indonesia is one of the largest and fastest growing economies in the Association of Southeast Asia Nations region. Recently upgraded to investment grade by Fitch Ratings and Moody's Investor Service, Indonesia is expected to grow 6.3% to 6.7% this year, based on its central bank's report last month.
"We are pleased to bring investors the MSCI Indonesia Index Futures, a means to easily access and manage risks of exposure to one of Asia's most promising economies. The listing of this contract on SGX, with its 17-hour trading session, also ensures investors can manage and hedge their Indonesian portfolios effectively even after hours," Mr Michael Syn, Head of Derivatives at SGX said.
"We are delighted to have licensed the MSCI Indonesia Index to SGX as the basis for a futures contract," said Mr Henry Fernandez, Chairman and CEO of MSCI. "SGX's selection of the MSCI Indonesia Index reflects the use of this index as a benchmark for the Indonesian market by institutional investors around the world."