RETAIL INVESTMENT | Tony Chua, Singapore

SGX launches Asia's first dividend futures contract

Nikkei Dividend Point Index Futures contract reached total volume of $23,1mln.

Singapore Exchange (SGX) has successfully launched Asia’s first dividend futures contract, the Nikkei Dividend Point Index Futures contract.

Since its 17 June debut, the contract has achieved total volume of over JPY1.5 billion (S$23.06  million) as at 1:00 am Singapore time on Tuesday. Bid-ask spreads have been under 2% for transactions of at least JPY60 million (S$922,703) on both sides, and as low as 0.2% for small-size transactions. Open interest stood at JPY600 million (S$9.23 million ) as at 1:00 am on Tuesday.

Mr. Chew Sutat, Executive Vice President and Head of Market Development at SGX said, “We are delighted with the active participation of the international investing community in the SGX Nikkei Dividend Point futures. The contract provides price discovery, transparency, and central clearing for over-the-counter dividend swaps. As a result, we have seen some migration of OTC dividend swap activity to SGX.”

BNP Paribas Securities (Japan) Ltd and Nomura International (Hong Kong) Ltd are market makers for the contract, according to an SGX report.

SGX is the world’s first exchange to trade the Nikkei Dividend Point futures, based on the Nikkei Stock Average Dividend Point Index. Nikkei Inc. calculates the index based on accumulated dividends received by investors from constituent companies of the Nikkei Stock Average over a calendar year. The contract trades from 7:45 am to 1:00 am (Singapore time).

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