A strategic approach for long-term success
FY2022 presented significant challenges for financial assets, but our multi-asset strategy has proven successful, leading to a record revenue of S$1.1 billion, the highest since our listing. This achievement was driven by strong growth in derivatives volumes across equities, currencies, and commodities. Despite ongoing uncertainties—such as geopolitical tensions, the highest inflation in a generation, and rising interest rates—our platforms continued to experience strong risk management and investment activity. The shadow of Covid-19 lingers, with global supply chains still facing difficulties.
In this challenging environment, Singapore Exchange (SGX) Group has swiftly adjusted its service offerings to create numerous growth opportunities for our customers. Our strategic acquisitions and investments over the past three years are yielding significant results. By expanding, collaborating, and acquiring, we have enhanced our multi-asset exchange, increased our international footprint, and expanded our network.
A key milestone for us was receiving an Aa2 long-term rating from Moody’s, the highest of any exchange group, which underscores our position as a central counterparty clearing-house and the strength of our business model across economic cycles. This investment-grade rating reflects our continued commitment to financial discipline as we scale our operations.
We remain dedicated to investing in opportunities that foster long-term growth and increase total shareholder return, enabling us to provide shareholders with a sustainable and growing dividend.
Expanding Growth Channels
As global economic risks increase, SGX Group is focused on simplifying access to Asia through our platforms, products, and partnerships. Our derivatives daily average volume (DAV) reached an all-time high in April, reaffirming our position as the benchmark for Asian equities. Our SGX FTSE China A50 Equity Index futures contract continues to lead the market, providing hyper-liquidity with US$6.4 billion in DAV.
In the foreign exchange (FX) and commodities markets, SGX has seen significant growth. Our FX product suite continues to grow, with OTC FX activity expanding, particularly after acquiring MaxxTrader and BidFX. This has positioned us to achieve an average daily volume of US$100 billion in the medium term. Meanwhile, our commodities division set a new record in FY2022, with iron ore derivatives and forward freight agreements increasing by 23% and 32%, respectively.
We are also capitalising on global trends in the electric vehicle (EV) market, with the launch of an EV exchange-traded fund (ETF) and a new EV company listing. These moves highlight how SGX’s diversified platforms can tap into emerging trends, positioning us as a key player in Asia’s growth.
Sustaining Momentum in Securities
In FY2022, SGX Securities saw 17 new equity listings, raising S$1.9 billion, almost double from the previous year. Our equity capital markets remain robust, with active discussions continuing for primary and secondary listings. Even as market uncertainty has impacted SPACs and secondary listings, we are optimistic about the opportunities ahead.
We are enhancing our product offerings, including increasing the number of single-stock futures and launching a new SSF on an Asian high-yield ETF. Our ETF market saw continued growth, with assets under management (AUM) increasing by 27% to surpass S$12 billion. This trend demonstrates our commitment to meeting the growing demand for passive investment solutions.
Digital Innovation in Fixed Income
We are leveraging technology to digitise fixed income markets, starting with Marketnode, our joint venture with Temasek. Marketnode is using smart contracts and distributed ledger technology to improve efficiency in Asia’s capital markets. Our work with SGX Central Depository has led to the launch of a “direct-to-depository” service for commercial paper, shortening the settlement cycle from five to two days.
Towards a Greener Future
Sustainability remains a key focus. SGX Group continues to support efforts towards a greener future, notably through the Glasgow Financial Alliance for Net Zero (GFANZ) APAC Network. As the global transition to a low-carbon economy accelerates, we are dedicated to facilitating this change and contributing to the region’s efforts to reduce its carbon footprint.
Strategic Partnerships Fueling Growth
Partnerships have always been at the core of SGX Group’s strategy. From pioneering clearing links to enhancing connections with global exchanges like the New York Stock Exchange, we have consistently built relationships that facilitate market growth. Our collaboration with India’s National Stock Exchange to launch the NSE IFSC-SGX Connect exemplifies our commitment to enhancing cross-border financial flows. Additionally, our work with the Shanghai Stock Exchange strengthens the connectivity between Asian and global markets, further supporting our expansion in Asia.
Looking forward, we are more committed than ever to becoming the global exchange partner of choice, leveraging synergies across SGX Group and its subsidiaries to deliver unparalleled service and stakeholder value.
