The Singapore Exchange is celebrating the 30th Anniversary of its forerunner, the Singapore International Monetary Exchange (SIMEX) with a video documentary entitled Founding Futures – The Making of a Global Exchange. If you have 18 minutes to spare, I encourage you to check it out. If not, at least click over and watch the two-minute trailer.
The video strikes a chord with futures market veterans as we recall the many ways in which SGX/SIMEX was at the forefront of the events that shaped the market these past few decades.
The deal between SIMEX and the Chicago Mercantile Exchange marked the first international exchange link-up, and the September 1984 listing of Eurodollar futures was the first to offer mutual offset – a major innovation that allowed round-the-clock liquidity in the pre-electronic age.
On Friday, October 16, 1987, the U.S. stock market suffered a late afternoon meltdown, and by the weekend, the world knew that Monday, October 19, would be ugly. When other Asian markets decided against opening that day, SIMEX was the only exchange brave enough (or crazy enough, or both) to open. The market took a brutal pounding but, in the end, the price discovery and risk transfer functions worked as intended, a watershed event for SIMEX.
SIMEX maneuvered through another scare eight years later, when a young trader for Barings Bank named Nick Leeson accumulated massive positions in Nikkei futures and other SIMEX products, ultimately losing $1.4 billion and leading to the collapse of Barings. SIMEX again was given credit for managing the crisis well.
John Lothian Productions assisted in the making of the video by interviewing a number of people here in the U.S. who shared their involvement with SIMEX, including CME Group Chairman Emeritus Leo Melamed, Bill Brodsky, who was president and CEO of CME Group in those early days of SIMEX, and Steven Schoenfeld, a fund manager who was a budding young trader in the Nikkei futures pit during the 1987 crash. The video also features numerous current and former SGX executives.
Now, here’s the funny part. A copy of the documentary was shipped to us last week, and when we opened the box, we were surprised to see it was sent on a VHS tape. “Welcome to 1984,” we thought. After having a good laugh about the format, given that SGX is on the technological cutting edge, and how we were going to have to blow the dust off of the VCR in the basement, we took the tape out of its sleeve. It turns out that the tape (pictured above) is actually a flash drive with an embedded video screen. It is perhaps the coolest piece of company swag ever.
Well played, SGX. And congratulations on reaching this milestone.