China’s shift of policy backed risk appetite for RMB: SGX

It increased demand for Asian foreign exchange.

There is strong hedging demand for Asian foreign exchange (FX) at the stock market as China removed its strict health policy and made way for risk appetite for renminbi, the bourse said.

Singapore Exchange (SGX) reported that total futures traded volume on FX posted 42% year-on-year (YoY) in January to 2.7 million contracts, led by 55% YoY volume increase in SGX.

“ADV of over-the-counter (OTC) FX climbed 18% y-o-y to about US$80b in January, on track to reach a medium-term target of US$100b,” it said.

For securities turnover, SGX said it outperformed as securities daily average value (SDAV) went up 24% MoM in January to $1.2b, as total market turnover grew 12% MoM to $22b, which is outpacing turnover growth in most Southeast Asian markets. 

“Turnover increased across all segments, led by Straits Times Index (STI) constituent stocks and real-estate investment trusts as activity rebounded from the year-end,” said SGX.

“The benchmark STI advanced 3.5% to 3,365.67 in January, its highest monthly close since April 2022,” it added.

Internet and semiconductor industries led the global stock market in January, with the technology industry booking most net fund inflows in the Lion City.