Malaysian derivatives market seen to grow by 5% to 8% in 2016

by **Cals** Mon 18 Apr 2016, 21:03

Malaysian derivatives market seen to grow by 5% to 8% in 2016

By Ahmad Naqib Idris / theedgemarkets.com | April 18, 2016 : 1:01 PM MYT

KUALA LUMPUR (April 18): Bursa Derivatives Bhd, the derivatives unit of Bursa Malaysia Bhd, is expecting mid to high single-digit growth in terms of contracts, driven by the benchmark crude palm oil futures contracts (FCPO) as well as the FBM KLCI futures (FKLI).

Bursa Derivatives acting chief executive officer (CEO) K. Sree Kumar said total contracts traded has more than doubled over the years from six million in 2010.

"We went into collaboration with CIMB in 2010, when we were doing an average of six million contracts a year. We are now doing in excess of 13 million contracts, more than double what we had years ago," he told reporters on the sidelines of the World Federation of Exchanges' (WFE) 33rd Annual Clearing and Derivatives Conference today.

"The volume has grown substantially, especially on our benchmark FCPO product.

"We have gone into revitalisation; we are pushing for more businesses to go for our index product, the FKLI, as well. It's a challenging time, but we expect growth of at least 5% to 8% year-on-year," Sree said.

According to Bursa Malaysia's annual report for the financial year ended Dec 31, 2015, the derivatives market saw total trades of approximately 14.1 million contracts during the year by 18 trading participants, over 246 trading days.

Sree said the FCPO and FKLI products will continue to be the main drivers of Malaysia's derivatives market, adding that the volatile currency and commodities market will continue to impact the performance of derivatives.

Earlier, the WFE conference was attended by senior executives and CEOs from WFE members, including Bursa Malaysia, BM&FBOVESPA, CME Group, Deutsche Börse, Nasdaq, the National Stock Exchange of India, Singapore Exchange and the Taiwan Stock Exchange.

"The conference is timely as the derivatives markets in the Asia region and Malaysia have experienced significant growth.

"We are cognisant of the need to continually bring together key industry drivers and stakeholders for conversations on the various business opportunities, challenges and regulatory trends, prospects and issues affecting the global derivatives market," said Bursa Malaysia CEO Datuk Seri Tajuddin Atan.