On 27 May (Wed), Singapore Exchange (SGX) announced that the contract for the license agreement it has with MSCI Inc. will not be renewed beyond February 2021.

This means that aside from MSCI Singapore Index products, the license for all other MSCI derivatives and options products will not be listed on the SGX (SGX: 68) after Feb 2021.

MSCI Inc. announced that it will move its range of derivatives and options products from Singapore to Hong Kong.

SGX Share Price Tumbles

After this announcement, SGX shares plunged 17.68%. The move was seen as a blow to SGX as MSCI will be signing a contract with their competitors, the Stock Exchange of Hong Kong (SEHK).

SGX Stock Price
Source: Google

In addition, SGX revenues in 2021 will be affected as well as the MSCI contract consists of around:

  • 15% of SGX’s equity derivatives daily average volume (DAV)
  • 12% of total derivatives DAV.