# SGX Group to launch interest rate derivatives in 2H 2024

- Link: https://www.thailand-business-news.com/markets/132009-sgx-group-to-launch-interest-rate-derivatives-in-2h-2024
- Published: 2024-03-20T10:16:09+07:00
- Author: Abhishek Prakash

Singapore Exchange (SGX Group) will introduce short-term interest rate futures linked
to the Singapore Overnight Rate Average (SORA) and Tokyo Overnight Average Rate (
TONA), as global investors increasingly seek more transparent and cost-effective
tools to hedge and trade fluctuations in interest rates.

Three-month SORA and TONA Futures contracts are targeted to be launched in the second
half of this year, subject to regulatory approval. These contracts build upon SGX
Group’s current suite of long-term interest rate futures – 10-year Full-Sized and
Mini Japanese Government Bond (JGB) futures – which have attracted diverse international
market participants.

ADVERTISEMENT

SGX Group is driving the futurisation of OTC derivatives to enhance greater capital
efficiency, price discovery and liquidity in Singapore’s Singapore Dollar (SGD) 
interest rates market. SORA Futures will be a new hedging tool for market participants
to manage their exposure to interest rate risks, amid growing issuance of SGD cash
market products that reference SORA. The contract will augment SGX Group’s Singapore
product shelf including its flagship SGX MSCI Singapore Index Futures and SGX USD/
SGD Full-Sized and Mini FX Futures.

The three-month TONA Futures will also complement SGX Group’s portfolio of Japanese
derivatives including JGB futures, SGX Nikkei 225 Index futures and options, as 
well as SGX USD/JPY FX futures. This comes on the back of market expectations that
Japan’s negative interest rate policy will come to an end, together with rising 
interest in the world’s third largest government bond market and record-highs in
the Nikkei 225 equity benchmark.

KC Lam, Global Head of FX & Rates, SGX Group, said, “The uncertain interest rate
environment, coupled with inflation and volatility in the macroenvironment, has 
increased the appeal and usage of interest rate derivatives as a cost-effective,
transparent hedging and trading tool. Our planned SORA and TONA Futures will complement
our expanding multi-asset derivatives franchise and provide additional cross-margining
tools for global participants.”

[[1]](https://www.sgxgroup.com/media-centre/20240312-sgx-group-launch-interest-rate-derivatives-2h-2024#_ftnref1)
SORA, published by the Monetary Authority of Singapore, is the volume-weighted average
rate of borrowing transactions in the unsecured overnight interbank Singapore Dollar(
SGD) cash market in Singapore.

### Related**Posts**

###  󠀁[Asian stocks retreat as oil rises above $100 and investors reassess global rate risks](https://www.thailand-business-news.com/markets/333019-asian-stocks-retreat-as-oil-rises-above-100-and-investors-reassess-global-rate-risks)󠁿

###  󠀁[What Would an ASEAN-Canada Free Trade Agreement Mean for Foreign Investors?](https://www.thailand-business-news.com/asean/331504-what-would-an-asean-canada-free-trade-agreement-mean-for-foreign-investors)󠁿

###  󠀁[Asian markets hold up despite bond rout as US yields enter a structurally higher regime](https://www.thailand-business-news.com/markets/332037-asian-markets-hold-up-despite-bond-rout-as-us-yields-enter-a-structurally-higher-regime)󠁿

###  󠀁[Local Influences and Return Chasing: Entering a New Era in Emerging Equity Markets](https://www.thailand-business-news.com/markets/329573-local-influences-and-return-chasing-entering-a-new-era-in-emerging-equity-markets)󠁿

[[2]](https://www.sgxgroup.com/media-centre/20240312-sgx-group-launch-interest-rate-derivatives-2h-2024#_ftnref2)
TONA, published by the Bank of Japan, is the volume-weighted average of actual transactions
in the Japanese Yen (JPY) unsecured overnight money market.

[Source](https://www.sgxgroup.com/media-centre/20240312-sgx-group-launch-interest-rate-derivatives-2h-2024)