April 9, 2021

NZX, SGX partner on dairy derivatives

In a joint announcement on April 8, New Zealand's Exchange (NZX) and Singapore Exchange (SGX) have signed a strategic partnership agreement to accelerate the growth potential of NZX's dairy derivatives.

The partnership brings together the complementary capabilities of the NZX and SGX to scale up market distribution and liquidity in the global dairy derivatives markets.

It will take effect in the second half of 2021, subject to regulatory approvals. This follows a Heads of Agreement that was mutually signed in October 2020 to explore the listing of NZX's suite of dairy contracts on SGX's trading and clearing platforms.

NZX chief executive, Mark Peterson, says NZX will continue to provide dairy product development expertise, market research and product support for new developments and enhancements. NZX will also continue to lead engagements with the dairy industry.

"We see huge opportunity through this partnership to unlock potential and propel the future growth of our dairy derivatives suite. By working together, we can leverage SGX's global market connectivity, strong Asian presence and international distribution, to scale growth and liquidity in the trading of dairy derivatives," Peterson says.

According to Loh Boon Chye, chief executive officer of SGX, Asia represents the world's largest bloc of dairy consumers and producers, and the partnership brings a world-class suite of dairy derivatives benchmarks and risk management tools to dairy participants and investors in Asia and beyond.

As part of the partnership, NZX intends to delist its suite of dairy derivatives contracts from the NZX Derivatives Market and equivalent contracts will be relisted on SGX. Market participants can expect augmented access via new trading and clearing channels.