The JSE currency derivatives market crosses R500 billion
May 06, 2013
JOHANNESBURG, 06 May 2013 - The Johannesburg Stock
Exchange’s (JSE) currency derivatives market recently reached the R500 billion
in total value traded milestone.
“In the past 14 months R250 billion has
been traded on our market – this is a rapid rate of growth compared to previous
years. It took two years between 2007 and 2009 to reach R100 billion in traded
value and a further two years to reach the R250 billion mark in 2011,” says
Warren Geers, General Manager in Bonds and Financial Derivatives at the JSE. In
March the JSE saw a record R43 billion traded.
Geers attributes this
milestone to the division’s launch of new products to the market including the
launch of Any Day Expiry contracts in 2011 in response to the wholesale market
looking to hedge their currency risk with increased precision. It was designed
with wholesale investors in mind with a minimum exposure of one million of the
foreign underlying (for example $1million). “Before the introduction of Any Day
Expiry contracts the trading of currency derivatives contracts were
standardised. In July 2013 the Any Day Expiry suite will be enhanced, allowing
the market to choose their own expiry dates on an automated electronic process.
This gives the market added ability to execute non-standardised contracts at the
push of a button,” says Geers.
The JSE’s currency market was first
established in 2007, but institutional investors and corporates only entered the
market in 2008 after a special dispensation in that year’s budget address. Since
then 66 million currency derivatives contracts have been traded on the exchange.
Between 2007 and April 2013, currency spreads have narrowed from an eight cent
spread to less than half a cent, making prices more competitive. Dollar-Rand
contracts make up more than 80% of the trading activity on the Exchange.
Geers hopes that other initiatives in the pipeline for 2013 and 2014
will boost volumes and result in the achievement of R1 trillion value traded.
“We are pleased with the growth that the exchange is experiencing in the forex
domain, and hope that we will continue to see exponential growth going forward,”
INFORMATION PLEASE CONTACT:
Tel: +27 11 463 2198
ON BEHALF OF
Bonds and Financial Derivatives, JSE
Tel: +27 11 520 7470
As South Africa’s only full service securities exchange,
the JSE connects buyers and sellers in four different financial markets, namely
equities, equity derivatives, commodities derivatives and interest rate
instruments. The JSE Ltd offers the investor a first world trading environment,
with world class technology, surveillance and settlement in an emerging market
context. It is amongst the top 20 largest equities exchanges in terms of market
capitalisation in the world.