Yield-X sets new trade record in Dollar/Rand Currency Futures

January 29, 2008 at 12:00 AM EST

In just over a month, the value of Currency Futures traded on Yield-X has doubled reaching the R2 billion mark.

“On December 13th last year, we announced that Yield-X had traded a total of 149 000 Dollar/Rand currency future contracts to the value of R1 billion since the launch on the 18th of June,” says Warren Geers, GM, Trading Division at the JSE. “While we have always been confident that volumes and value traded would continue to rise consistently over time, we never anticipated that we would trade an additional 135,327 currency future contracts in just over a month and double the Rand value traded. To date we have thus traded a total of 284 327 currency future contracts. The Euro/Rand and Pound/Rand contracts have also become very attractive contracts adding to the total number of contracts traded”, continues Geers.   

Geers attributed the exceptional growth in the last month to the sizeable increase in the number of retail client's becoming more actively involved with currency futures. “Retail clients are becoming more educated about the benefits that currency futures have to offer”, says Geers. “The one objective of launching currency futures, among others, was to allow the South African retail market to access the currency market which is generally reserved for institutions”, continue Geers. The JSE feels that this objective is being successfully achieved.  

Geers also indicated that volumes traded have grown as a result of the recent market volatility as well as from an increase in marketing efforts pursued from each of the two market makers, Standard Bank and Investec Bank. Additionally Standard Bank Online and Investec Securities have been actively promoting and encouraging their clients to trade the currency futures.

Since the corporate and wholesale market has been excluded from trading currency futures all trades to date has been purely from the retail market. The JSE has submitted its second application to the South African Reserve Bank and National Treasury, which motivates corporate entities trading the currency futures. “We hope to have some positive feedback in the February budget speech”, says Geers.

Although the Euro/Rand and Pound/Rand contracts have begun to trade substantial volumes the Dollar/Rand contracts continue to be the most liquid. 

About JSE Limited

As South Africa's only full service securities exchange, the JSE connects buyers and sellers in four different financial markets, namely equities, equity derivatives, agricultural derivatives and interest rate instruments (Yield-X). The JSE Ltd offers the investor a truly 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.