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Singapore's RMB Futures Market Gets Under Way As China Currency Trend Continues
The volume of news and chatter around the expansion of renminbi-denominated financial business continues. Yesterday, the Singapore Exchange launched RMB futures.
The volume of news and chatter around the expansion of renminbi-denominated financial business continues. Yesterday, the Singapore Exchange launched RMB futures, clocking up 1,846 contracts, equal to a notional value of RMB1.1 billion ($179 million) on the first day of activity.
Market makers and participants for the contracts included Bank of China Singapore branch, DBS Bank, ICBC Singapore branch, Quantrun Investment Management and Virtu Financial, the Singapore Exchange said in a statement.
The move is part of a continuing example of how the renminbi’s status as a global currency is growing. On 20 October, Hang Seng Indexes Company and Markit launched a series of indices to track renminbi-denominated sovereign and corporate bonds; As China looks to boost use of the RMB as a global currency, RMB-denominated debt issuance is growing. As an example, the UK government has recently moved to issue debt in the currency. In the equity market, Moody’s Investor Services, the ratings agency, has said that firms that move early into running renminbi-denominated exchange traded funds under China’s Renminbi Qualified Foreign Institutional Investor quotas will gain a strong edge over rivals.
To get the launch off the ground, more than RMB1 billion in cash has been deposited with SGX as margin collateral by market participants.
The exchanges range of Asian foreign exchange futures has logged over $10 billion in total notional traded value over the past 12 months.
Mainland Chinese banks need to make a bigger push to ensure Singapore’s renminbi markets develop rapidly, ICBC chairman Jiang Jianquing recently told a recent conference focusing on market developments in the city-state.
Separately, the Singapore Exchange yesterday reported first-quarter revenue of S$169 million ($232 million), a drop of 8 per cent lower year on year, and net profit of $78 million, down 16 per cent.
