NZX exploring global dairy derivatives partnership with SGX

NZX Limited Singapore Exchange
Level 1, NZX Centre SGX Centre 1
11 Cable Street 2 Shenton Way, #02-02
Wellington 6140 Singapore 068804
New Zealand
www.sgx.com
www.nzx.com


NZX exploring global dairy derivatives partnership with Singapore Exchange (SGX)

13 October 2020 – NZX and Singapore Exchange (SGX) have today signed a Heads of Agreement in
relation to a global partnership to grow NZX’s dairy derivatives market together.
The non-binding agreement signed between both exchanges will explore the listing of NZX’s suite of dairy
derivatives contracts on SGX’s trading and clearing platforms.
This would see NZX bring its dairy product development expertise and client relationships, while
leveraging SGX’s global market connectivity, strong Asian presence and international distribution, to
scale growth and liquidity in the trading of dairy derivatives. Market participants could expect augmented
access via current and new trading and clearing channels.
NZX launched its dairy derivatives market in 2010, enabling market participants across the dairy
production chain – from farmers through to international manufacturers of dairy products – to efficiently
manage price risks inherent within global dairy markets.
Over the past 10 years, NZX has grown the contract suite to include eight futures and options contracts
across dairy ingredients including Whole Milk Powder (WMP), Skim Milk Powder (SMP), Butter (BTR) and
Anhydrous Milk Fat (AMF) as well as liquid NZ Milk Price (MKP) contracts. NZX has five member firms
connected to the market and two Independent Software Providers (ISVs).
NZX Chief Executive, Mark Peterson, says a partnership with SGX would be a showcase example of
commercialising NZX’s international alliance strategy and would propel future growth of the dairy
derivatives suite.
The partnership builds on the Memorandum of Understanding signed between the two exchanges in
2018, to expand co-operation in the Asia-Pacific region and promote market development initiatives
across multiple product sectors.
“This opportunity offers a further acceleration in liquidity for our global dairy derivatives contracts by
harnessing greater access via SGX’s global network of trading and clearing firms, while leveraging NZX’s
dairy market expertise, insight and ongoing marketing and sales in a franchise that has been built from
the ground up.”
NZX Chair James Miller says NZX’s strategy refresh in 2017 clearly identified the importance of
developing greater breadth of distribution and trading functionality.
“Through a global partnership with a large international exchange such as SGX, there is opportunity to
unlock and accelerate growth in liquidity and market scale. As the world’s largest exporter of dairy
products, New Zealand is an integral part of the global dairy market. The intention of the partnership is to
benefit all participants and put the New Zealand dairy industry on an equal footing with their global
counterparts in their ability to manage risk," he added.
SGX Chief Executive Officer, Loh Boon Chye says: “Our partnership with NZX demonstrates that
exchanges can collaborate for mutual benefit and the betterment of the wider industry.

“With its rising population and changing demographics, Asia will remain one of the largest consumers and
importers of New Zealand’s dairy products. We believe our successful commodities derivatives franchise,
with its established infrastructure and ecosystem, coupled with our global distribution network and strong
Asian footprint, will enable us to work with NZX to fuel growth in the dairy derivatives market.”
Over the coming months, NZX and SGX will consult with their respective market participants and
stakeholders, and seek regulatory approvals related to the proposed global partnership. Should this
process be successful, the partnership is expected to be confirmed in the first half of 2021.

ENDS.


About NZX:
For more than 150 years we have been creating opportunities for Kiwis to grow their personal wealth and
helping businesses prosper. As New Zealand’s Exchange, we are proud of our record in supporting the
growth and global ambitions of local companies.

NZX operates New Zealand's equity, debt, funds, derivatives and energy markets. To support the growth
of our markets, we provide trading, clearing, settlement, depository and data services for our customers.
We also own Smartshares, New Zealand's only issuer of listed Exchange Traded Funds (ETFs), and
KiwiSaver provider SuperLife. Our NZX Wealth Technologies subsidiary is an online asset management
platform. Learn more about us at: www.nzx.com

About SGX:
Singapore Exchange (SGX) is Asia’s leading and trusted market infrastructure, operating equity, fixed
income and derivatives markets to the highest regulatory standards. As Asia’s most international, multi-
asset exchange, SGX provides listing, trading, clearing, settlement, depository and data services, with
about 40% of listed companies and over 80% of listed bonds originating outside of Singapore.

SGX is the world’s most liquid international market for the benchmark equity indices of China, India,
Japan and ASEAN and offers commodities and currency derivatives products. Headquartered in AAA-
rated Singapore, SGX is globally recognised for its risk management and clearing capabilities. For more
information, please visit www.sgx.com.

For further information, please contact:

NZX
David Glendining, Head of Communications
T +64 27 301 9248
david.glendining@nzx.com

SGX
Chin May Nah, Head of Media Communications
T +65 8223 7358
maynah.chin@sgx.com