Loh Boon Chye took over the Singapore Exchange CEO post in July 2015 with a focus on growing the overall business in derivatives, clearing and equities. But he faces headwinds across the asset classes as China’s economy slows. Boon Chye, however, believes the exchange is well positioned to move forward in 2016.
SGX has made a name for itself by introducing equity index futures with the Nikkei 225 futures, among others. The exchange now is broadening its China product suite with the introduction of a series of equity derivatives based on MSCI indexes including the MSCI China Free Index. The new product follows the FTSE China A50 futures contract, which ranks 18th among global futures exchange in 2015, and traded 95.8 million contracts last year, up 131 percent from 41.3 million contracts a year earlier, according to the Futures Industry Association annual survey.
“To be the Asia market access, multi-asset platform, the key will be to focus around the different multiple asset classes we have, said Loh Boon Chye, speaking to John Lothian News at the FIA Boca conference. “But also [focus] on the country strategy because for investors in Asia, typically you will always have a top-down macro view, followed by a country selection, then asset class selection to express that view and then maybe down to stock picking.”
SGX is also expanding its India index offering beyond its Nifty 50 futures, with four more Indian sector-specific index futures contracts in partnership with the National Stock Exchange of India.
Boon Chye is also trying to navigate the current exchange landscape as well. SGX has made a bid for the Baltic Exchange, London-based freight and shipping marketplace, although he declined to speak further on the offer. But regionally, SGX has always promoted itself as a gateway to the Asian market, a roll it will continue to follow.
From a technology perspective, SGX is working on upgrading its trading engine, which will increase its capacity from average daily volumes of 3 million to 10 million contracts. It is also providing better access tools for customers to make connecting to SGX easier. SGX is looking to bolster its OTC business as well.
“We’re designing a process that will make the workflow a lot simpler and easier for interdealer brokers,” he said. “And I think we’re unique in that space.”