06 October 2017
Leveraged Products Reached Turnover Record in September
  • Since the launch of a new product class, a new turnover record in SGX listed leveraged products was reached in September of SGD 1.9 billion or SGD 96 million per day. This amount consisted of S$1.2 billion in Structured Warrants and SGD 758 million in DLCs. This activity level has not been seen since May 2008.
  • Structured Warrant trading made up more than three-fifths of the turnover in SGX listed leveraged products during September. Structured Warrant Turnover for the month was up 52% from September 2016 turnover and up 277% from September 2015.
  • Lion Global Investors (LGI), together with Phillip Capital Management, will launch their new REITs ETF – the Lion-Phillip S-REIT ETF (Stock code: CLR; Bloomberg: SREITS SP) – on SGX on 30th Oct 2017.

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Revival of Singapore Leveraged Products market

 

Volumes in SGX listed Structured Warrants had been in decline since their peak in 2007. As has been shared via this medium many times, we have seen a reversal since Q1 2016 where warrant volumes sowed a positive trend again. Due to the launch of a new product class – Daily Leverage Certificates (DLCs) which are our new first-in-Asia products on SGX – a new turnover record was reached in September of SGD 1.9 billion or SGD 96 million traded on average per day.

 

The daily average turnover of leveraged products accounted for 8.8% of the overall Singapore securities market daily average in September 2017.

 

 

Structured Warrants

 

August and Sept have seen higher volatility in the HSI resulting in higher trading activity in especially the SGX listed HSI Structured Warrants. Majority of turnover was generated in Macquarie warrants. Other active issuers are UBS, Vontobel and JP Morgan.

 

Daily Leverage Certificates

 

SGX launched DLCs in mid-July this year,  attracting new traders to our market, generating additional turnover (SGD 758 million in Sept). Wednesday 4 October actually showed one of the largest daily moves for a 5x DLC since the launch, the HSCEI 5x Long was up 18.5%, showcasing the potential of DLCs. In September around 70% of DLC turnover was in SiMSCI DLCs (unlike Structured Warrants where majority in turnover typically is generated in HSI warrants). On 5 October, total turnover since launch on DLCs equalled SGD 1 billion, a major milestone for a newly introduced product.

 

DLCs have less complex product features compared to warrants and options, and therefore may suit a different audience. Broker & Investor feedback on the new product has been positive and together with them, the product issuer (SocGen) and SGX , we will be organizing more (educational) campaigns to generate more awareness and insights into possible trading strategies.

 

Overall DLCs traded more from Long perspective in September in total, however on an index level the HK indices are traded more from the long side , while SiMSCI is traded slightly more from the short side.

 

Underlying Index

% of turnover in Long DLC

% of turnover in Short DLC

SiMSCI

44%

56%

HSI

76%

24%

HSCEI

77%

23%

Total

54%

36%

 

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New 100% Singapore REITS ETF to be listed 30 October 2017 - Lion-Phillip S-REIT ETF

Lion Global Investors (LGI), together with Phillip Capital Management, will launch their new REITs ETF – the Lion-Phillip S-REIT ETF (Stock code: CLR; Bloomberg: SREITS SP) – on SGX on 30th Oct 2017. The ETF tracks the Morningstar® Singapore REIT Yield Focus Index (MSDIRYPS Index), which comprises 23 Singapore REITs and has a trailing 12-month dividend yield of 5.75%

 

The launch of this ETF with a large focus on Singapore will help growth in the SGX S-REITs segment as it offers a sustainable income stream & portfolio diversification through exposure to the high-quality S-REITs at a low cost

 

The initial offer period for the Lion-Phillip S-REIT ETF runs from 2 October to 20 October 2017, and the issue price of each unit during the offer period is S$1

 

A retail seminar will be hosted by LGI to introduce the ETF “Lion-Phillip S-REIT ETF: Introducing a low-cost way to access high-quality S-REITs through one fund”.  For more details, please click here 

 

More information on the ETF can be found here.

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More Information

 

The SGX Structured Warrants Page includes tools like a calculator, charts and position builder. (click here)

You can also find out more about DLCs here.

 

Issuer Pages:

§  Macquarie Warrants

§  UBS

§  Vontobel Warrants

§  SocGen DLCs

 

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Specified Investment Products

Structured warrants and Daily Leverage Certificates are examples of Specified Investment Products (SIPs). The MAS has introduced measures for intermediaries to safeguard the interests of individual investors investing in SIPs, which are products with features that might be more complex in nature. Investors now have the opportunity to assess their qualifications to trade SIP or enhance their product knowledge through the SGX online portal available here. Speak to your broker to find out how you can qualify to trade SIPs.

 

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Education and Resources

 

Benefits of ETFs

Trading DLCs on SGX

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§  More educational videos  (link)

§  Full list of SGX listed ETFs (link)

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§  SGX DLC investor guide (link)

§  SGX DLC factsheet (link)

§  SGX DLC Infographic (link)

 


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