February Highlights of SGX MSCI Net Total Return Index Futures
  • Total notional value traded across the SGX MSCI Net Total Return (“NTR”) franchise up 175% m-o-m to over US$4 billion.
  • Aggregate open interest in the NTR suite up 90% m-o-m reaching US$3 billion as a result of increased adoption.
  • SGX MSCI India NTR (“NMD”) continues to garner strong institutional interest, volume market share of 70% as at end February.
  • SGX MSCI Taiwan NTR (“NTW”) volume market share doubled m-o-m to 45% (US$1.5 billion notional) – making February a record month for the contract.

The SGX MSCI Net Total Return (“NTR”) Index Futures, which were designed to provide easy access to emerging market (EM) Asia equities and to meet increased demand for centrally cleared trading solutions, got off to a great start in February.


The total notional value traded across the SGX MSCI NTR franchise grew to over US$4 billion, up 175% month-on-month (m-o-m), while the aggregate open interest in the NTR suite reached US$3 billion, up 90% m-o-m mainly on increased adoption.  Most notably, the SGX MSCI India NTR (“NMD”) continues to garner strong institutional interest with volume market share in February hitting c.70% (US$ 2.8 billion notional), on the back of active screen trading.


SGX MSCI Taiwan NTR (“NTW”) volume market share doubled m-o-m to 45% (US$1.5 billion notional), making of February a record month for the contract.     



Tapping into Dividends


According to Bloomberg, EM net debt to equity has dropped steadily from 100.9% (as of end 2016) to 98.8% (as of end 2017),an indication of overall stronger balance sheet from EM corporates. In tandem, EM corporates have been increasing their dividend payouts in recent years. Dividend rates for EM corporates have increased from 2.27% (as of end 2017) to 2.39% (as of March’ 18).


NTR indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident. Hence investors who wish to capture performance of equity performances of securities – including dividends (if any) paid by stocks composing the index – should consider SGX MSCI NTR index futures contracts within their trading strategies. 


SGX remains the only exchange in Asia to offer futures contracts on both price return and net total return versions of MSCI equity indices, thereby providing the widest range of derivatives to investors seeking to access Asia’s key EM equities - China, Taiwan, India, which collectively represent over 50% of the MSCI Emerging Market Asia NTR IndexSM. SGX broadened its franchise with futures on MSCI Emerging Markets and Emerging Markets Asia in 4Q 2017, and riding on the strong market adoption seen so far will further extend its coverage in 2018.


Liquidity Profile of SGX MSCI NTR Index Futures


With over 22 hours of trading across major time zones for SGX MSCI NTR futures, foreign  investors are able to make use of both the regular T session from 7:25am to 6:35pm (Singapore time) and the T+1 session from 7:00 pm to 4:45am (Singapore time) to invest and hedge against volatility during Asian, European and US time zones.


In addition, our suite of futures and options contracts remain available for trading on all onshore holidays, with the exception of New Year’s Day (1 January). Margin discounts on spreads formed with other SGX derivatives allow for greater capital efficiency for investors with views on multiple Asian markets and asset classes. 



Cross-margin offset* across Equity Futures



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