FIA Asia Derivatives Conference Asian Financial Markets Become More Mainstream 10 August 2005 Singapore Exchange Linus Koh Executive Vice President Head of Products & Services 1 Singapore Exchange Limited
Since 1999, the global market for exchange traded derivatives has more than tripled from 2. 4 b to 8. 9 b contracts § Growth has been driven primarily by financial derivatives Equity Indices Interest Rate Individual Equities Equity Indices (ex-KOSPI) Source: FIA Ag. Commodities: Soyabean futures (Dalian, Tokyo Grain Ex), Corn futures (CBOT) Energy Products: Crude oil & unleaded gas futures (NYMEX) Non-Precious Metals: Copper futures (Shanghai Futures Exchange) Foreign Currency / Index: Euro. FX (CME) Precious Metals: Gold & silver futures (NYMEX) § …and has kept pace with OTC markets 2
In 2004, the top 10 derivatives exchanges accounted for 74% of the total volume for exchange traded derivatives § Since 1999, Eurex, Euronext. liffe, CME, CBOT and CBOE have been among the top 10 derivatives exchanges with growth greatly due to their financial derivatives contracts. Korea is the only Asian Exchange in the top 10. 2004 Rank Million contracts Top Contract 1 Korea Futures Exchange (KRX) Kospi 200* 2, 586. 8 2 Eurex Euro-Bund Futures 1, 065. 6 3 Chicago Mercantile Exchange (CME) Eurodollar Futures 805. 3 4 Euronext. liffe Euribor Futures 790. 4 5 Chicago Board of Trade (CBOT) T-Note Futures 600. 0 6 Chicago Board Options Exchange (CBOE) Equity Options 361. 1 7 International Securities Exchange (ISE) Equity Options 360. 9 8 Bolsa de Valores de Sao Paulo (Bovespa) Equity Options 235. 3 9 Mercado Mexicano de Derivados (Mex. Der) TIIE 28 Futures 210. 4 10 American Stock Exchange (AMEX) Equity Options 202. 7 Total 7, 218. 5 Source: FIA * The KOSPI 200 contracts, transferred from KSE to KOFEX in 1/04, are of a low notional value and retail dominated 3
Asian exchanges continue growing, but are not quite mainstream yet § In 2004 (as in 2003), Asia / Pacific captured the largest share of the global market for exchange traded derivatives, driven primarily by KRX’s Kospi 200 options & futures. Source: FIA 4
All factors point to this being the decade for derivatives growth in Asia § Strong economic growth v Average Asia Pacific GDP growth of 6 -7% forecast to outpace that of the OECD Source: Central Intelligence Agency Date of Information: 2004 est. 1. …disproportionately increasing endogenous interest in commodities, and inbound participation in equities 1. Increasingly sophisticated investors 1. Rising education levels & increasing standards of living 2. High degree of speculation among retail investors 2. Developing infrastructure for technology and telecommunications 1. Korea: World-class telecommunications infrastructure with highest broadband penetration 5
The emerging global competitive landscape § Electronic trading has shifted the competitive landscape for exchanges v Migration to electronic trading has allowed for Ø greater geographic reach via remote direct trading access (e. g. CME, NYMEX), Ø new business opportunities as systems solution providers (e. g. OMX, Euronext), & Ø extension of services into order routing and back office operations v This has provided exchanges with an opportunity to increase profit margins, v However, it has also lowered barriers to entry for competition & intensified price competition based on greater cost efficiencies 6
The emerging global competitive landscape 1. Electronic trading has shifted the competitive landscape for exchanges 2. Many exchanges are now also motivated by shareholder requirements 1. new exchanges have established themselves as corporate entities whilst existing exchanges have demutualized and/or listed Demutualisation 2004 Osaka Securities Exchange, Bursa Malaysia 2002 Chicago Mercantile Exchange 2001 Tokyo Stock Exchange, Paris Bourse, Deutsche Bourse, Oslo Exchanges Incorporation / Listing 2000 Toronto Stock Exchange, Sydney Futures Exchange, London Stock Exchange, Hong Kong Stock Exchange, New York Mercantile Exchange & Pacific Exchange 2004 Bursa Malaysia, International Securities Exchange 2003 OMHex/OMX 2002 Chicago Mercantile Exchange, Toronto Stock Exchange, Sydney Futures Exchange 2001 Euronext, London Stock Exchange 1999 Iceland Stock Exchange, Athens Stock Exchange, Stock Exchange of Singapore, Singapore International Monetary Exchange, London International Financial Futures and Options Exchange 2000 Hong Kong Exchanges & Clearing, Singapore Exchange 1998 Australian Stock Exchange 1997 Amsterdam Exchanges, Borsa Italiana 1995 Tradepoint/virt-x 1996 Copenhagen Stock Exchange 1995 Helsinki Stock Exchange 1993 Stockholm Stock Exchange 7
The emerging global competitive landscape 1. Electronic trading has shifted the competitive landscape for exchanges 2. Many exchanges are now also motivated by shareholder requirements 3. Customers have also begun looking for integrated offerings across markets 1. commoditization of execution services 2. growing demand for bundled clearing services, asset class and market integration, new trading and market data tools 8
The emerging global competitive landscape § § Electronic trading has shifted the competitive landscape for exchanges Many exchanges are now also motivated by shareholder requirements Customers have also begun looking for integrated offerings across markets As a result, competition among exchanges has intensified. Many exchanges are: v aggressively expanding into other markets, and v concurrently using price as a competitive lever. § In response, v some European Exchanges are moving to offering fully integrated services, v while some US Exchanges are bridging the gap between futures & options, US Europe Derivatives Trading Euronext. liffe 100% Cash Trading 3. 6%* Clearing Euronext Settlement Euroclear 25% LCH. Clearnet 10% * Deemed interest may be higher Eurex 50% Deutsche Bourse 100% Clearstream Clearing 100% Clearstream Settlement CME attempted to acquire ISE Futures Exchanges Options Exchanges CME CBOT CBOE Futures One. Chicago PBOT NYMEX NYBOT ISE AMEX CBOE PHLX BOX PCX CBOE opened a futures exchange subsidiary v other exchanges are using M&A as a general growth strategy PHLX reviving PBOT to list equity index futures 9
…presents a number of challenges to Asian Exchanges § Global competition entering Asia v CME established first Asian telecommunications hub in Singapore v CBOT exploring telecommunications hub in Japan § Difficulty of cross-border integration / co-operation v Regulatory barriers e. g. capital controls, restricted licenses v Incompatible technology & market infrastructure v Lack of investor familiarity with regional markets § Concerns about retail market speculation v Slowdown of Kospi futures and options trading following steps to curb retail speculation by raising initial deposit requirements § Asian Exchanges could respond by: v expanding their suite of derivatives products to meet complementary onshore/offshore demand, v further lowering regulatory and infrastructure barriers, and v developing alliances. 10
Update on SGX Developments § In December 2003, we commissioned OMX to develop an integrated trading engine for our securities and derivatives market. SGX launched Quest-DT in August 2004. § We are progressively launching existing floor traded products electronically. § We have offered margin efficiency to customers as a means of enhancing their capital efficiency through enabling margin offsets in the form of intercommodity spreads across different equity-based contracts including Nikkei 225, MSCI Taiwan & MSCI Singapore. § We are developing & implementing an over-the-counter (“OTC”) clearing facility for energy derivatives and forward freight agreements in 1 Q 2006. 11
Growth of SGX Electronic Market e-TW e-JGB SGX Quest § § e-NK Total electronic trading volume grew 330% in the 1 st half of 2005 Achieved an average daily volume (Jan-Jun 05) of 53, 400 contracts Performance Growth in Trading Volume Nikkei 225 Index Future 19% in 1 st half of 2005 Mini JGB Future 18% in 1 st 3 mths after launch Record Volume (Jun 05): 198, 806 Record OI (Jun 05): 78, 268 MSCI Taiwan Index Future 38% yr-on-yr monthly trading volume Record Volume (Jun 05): 816, 250 Record DAV (Jun 05): 158, 061 12
FIA Asia Derivatives Conference Asian Financial Markets Become More Mainstream Singapore Exchange 13
Скачать презентацию FIA Asia Derivatives Conference Asian Financial Markets Become
e2d7614f8b90882fea8f3a14da9099b1.ppt