Szala, Ginger, Futures (Cedar Falls, IA)
The annual Futures Industry Association (FIA) conference in Boca Raton, FIa. is a good time to take the industry's temperature. The 2012 meeting was somewhat somber, with MF Global still on everyone's mind (PFG hadn't been discovered yet). Volumes were dropping and customers were in hiding. Dodd-Frank still had many gaping holes, and, it being a U.S. presidential election year, there still were many regulatory uncertainties. But the 20 13 Boca meeting seemed upbeat.
Volume in 2012 did drop, about 12% down overall in U.S. markets and 17% overall on international exchanges. But those generalities don't really tell the story (see "Traders' View of the World," page 32). During one FIA session, moderator Maria Bartiromo asked exchange CEOs about the muted volumes. Magnus Böcker of the Singapore Exchange said he didn't have a comment because his exchange grew in volume last year. He's right, Singapore's main exchange had about an 1 1% growth in volume, largely driven by its FTSE/China A50 Index futures and Nikkei 225 options products.
What's notable about this growth is it was in financial products, which for the most part were loss leaders across the globe. For example, the CME Group's ?-mini S&P 500 futures contract volume was down 23% for the year. In the United States, overall futures volumes in interest rates were down 21%, equity indexes down 20% and precious metals down 17%. The strong growth (and apparently proper diversification) was in commodity futures products: Ag commodities up 6%, energies up 21% and, perhaps an indicator of the strengthening economy, non-precious metals up 33%. It was a similar story at overseas exchanges, with the star being energy products, compliments of ICE Europe and the Dubai Exchange, with growth in volume almost tripling compared to last year.
When asked where growth will be in the next year, almost all CEOs saw China as the main driver. And positive exchange growth typically was seen in the Asian markets and products. …