SDRs offer US stocks traded in SGD in Asia hours
SpaceX SDR trading is 0.0007% of its US counterpart

By Gregor Stuart Hunter

SINGAPORE, Sept 23 (Reuters) - Singapore’s effort to offer trading in American stocks during Asia hours has gotten off to a sluggish start as rival products and wary investors keep early volumes extremely low, showing how hard it is for regional bourses to get a slice of demand for around-the-clock US trade.

Singapore Exchange (SGXL.SI) listed its first three US stocks through its Singapore Depository Receipts (SDR) program in July, with locally denominated shares in Grab (GRAB.SI) , Sea Ltd (SEAL.SI) and SpaceX (SPCX.SI) .

Since then, just $2.3 million worth of SpaceX SDRs has changed hands through September 18, a small fraction of the roughly S$2 billion ($1.6 billion) in average daily SGX turnover and some $336.6 billion in SpaceX (SPCX.O) stock traded on the Nasdaq, according to Reuters calculations.

The entirety of trading of SpaceX since its listing in Singapore represents 0.0007% of its total in the US during the same period, Reuters calculated. A total of around $24 million in Grab and Sea SDRs was traded in the period, compared with $26 billion in the US.

Singapore’s SDR program, first launched in 2023, is one of several parts of a broader bid to boost an equities market that has long lagged the city’s standing as one of Asia’s most dynamic financial centres.

SGX has said the 38 SDR listings, which also include Thai, Indonesian and Hong Kong stocks, offer access to global companies during Asian hours and are not aimed at replicating volumes in their home markets.

Still, the lack of investor interest thus far has left liquidity low and underscores the challenge facing Singapore and regional bourses as global exchanges prepare to trade around the clock.

The SDR rollout was “anticlimactic,” said Chris Forbes, head of Asia and Middle East at CMC Markets in Singapore.

“They’re too late to the party … everyone else has developed alternatives,” he said.

Globally strong interest in US equities has driven brokers, exchanges and cryptocurrency firms to offer derivatives and other products promising around-the-clock US stock trading.

Nasdaq and NYSE Arca are readying a December 6 launch for a 24-hour trading programme, while the London Stock Exchange expects to launch its own in the first half of next year.

Grab and Sea declined to comment on their SDRs, while SpaceX did not respond to requests for comment. The companies were not directly involved in the SDR launches.

Luke Lim, managing director at Singapore brokerage Phillip Securities, which is the issuer designated by SGX to create SDRs by owning the underlying stock in trust and selling local units to the public, expects to launch more.

Carmen Lee, the head of equity research at OCBC, said local investors are usually more familiar with firms that are locally listed.

“Many investors in Singapore still not quite familiar with SDRs,” she said, adding that they are also not included in benchmarks like the Straits Times Index or MSCI’s indexes.

($1 = 1.2672 Singapore dollars)