Bursa Malaysia Derivatives Berhad (“Bursa Malaysia Derivatives”) will be launching an after-hours (“T+1”) trading session (“Night Trading”) by the fourth quarter of 2021, to enhance the attractiveness of the Malaysian derivatives market to traders around the world.
Available for most Bursa Malaysia Derivatives products, Night Trading is a significant development that aligns the Exchange with global market practices. It sets to enhance price discovery of Bursa Malaysia Derivatives’ offerings given the substantial growth in derivatives market participation since 2019.
Last year, the total number of contracts traded registered a 35% growth, increasing to 18.2 million contracts from 13.5 million contracts in 2019, with foreign participants contributing 46% of the total trading volume.
On 30 June 2021, the total monthly trading volume for the Exchange’s Crude Palm Oil Futures contract (“FCPO”) renewed its all-time high at 1.7 million contracts, which is equivalent to 42.6 million metric tons of crude palm oil traded, surpassing the previous
record of 1.66 million contracts traded in March 2020.
“The recent volatility in crude palm oil prices demonstrated the need for Night Trading. It will provide an avenue for market participants to better manage their price risk exposure based on real-time global developments in different time zones,” said Samuel Ho, Chief Executive Officer of Bursa Malaysia Derivatives. “We will continue to work with our stakeholders to ensure smooth implementation of the Night Trading.”
Bursa Malaysia Derivatives recently received Approval-in-Principal (“AIP”) from the Securities Commission Malaysia to operate Night Trading.
Added Samuel, “Enhancing the trading ecosystem will help sustain the strong interest and promote further internationalisation of the Malaysian derivatives market. Market participants can look forward to more infrastructure enhancement projects which will be
rolled out in stages later this year.”
