Singapore Exchange to launch Asian government bond futures

Singapore Exchange will roll out Asian government bond futures in the coming weeks, CEO Loh Boon Chye said on Monday, as investors increasingly turn to hedging tools amid market strains fueled by rising geopolitical tensions, reports Reuters.
The decision comes amid a global selloff in bonds on fears that the renewed Middle East conflict could stoke inflation and prompt more hawkish moves by the central banks. Bond futures are a crucial tool to manage interest rate risk.
Investors and traders typically use derivatives to hedge risk, amplify returns ?or speculate on price movements without owning the underlying asset.
"If you are really a global participant in the Asian economy portfolio, what is important is to have popular risk management," said Loh.
Singapore Exchange's decision comes months after the derivatives arm of the exchange said that it would launch bitcoin and ether cryptocurrency perpetual futures trading on its platform.
However, Asian bonds drew foreign inflows for a fourth consecutive month in January, as an improving growth outlook and firm demand for regional exports continued to support investor interest.
Foreign investors bought a net $3.78 billion worth of local bonds in South Korea, Thailand, Malaysia, India and Indonesia in January, compared with net purchases of $8.07 billion in December, according to official data.