SGX confident of derivatives growth as investors ‘rebalance portfolios:’ CGS-CIMB

The analyst said investors are rebalancing portfolios amidst cost pressures.

Amidst the uncertainties brought about by the macroeconomic issues, CGS-CIMB said investors are starting to “rebalance their portfolios” and manage risks.

However, bourse, Singapore Exchange (SGX), remained unfazed by this as it is confident that there is continued derivatives volume growth.

Much like tuning up a vehicle, rebalancing portfolios means investors are minimising their risk by keeping their assets in check.

“Although consumer risk sentiment (and therefore equities ADV) had tapered off this year in tandem with the Fed rate hikes, SGX remains fairly confident of continued equity derivatives volume growth,” said CGS-CIMB in a brokerage report.

“This is expected to be driven by risk management moves and portfolio rebalancing to navigate macroeconomic uncertainty,” it added.