Acuiti Consolidates Reports into Sentiment Index with SGX

Research firm Acuiti has unveiled The SGX Global Market Sentiment Report, in association with Singapore Exchange, that effectively consolidates sentiment from five groups of executives in hedge funds, sell side execution and clearing, prop trading firms and asset managers.

The index is calculated based on a survey of Acuiti’s Expert Networks, comprising 465 senior executives from across the global market, that have previously been segment-based by company type. Each quarter, Acuiti surveys the networks on a range of topics including their outlook for the coming three months. The sentiment index is calculated as the percentage of respondents that are optimistic for the three months ahead, and the overall score represents the average across all company types.

The first report finds that overall industry sentiment across derivatives markets nudged up in Q3 on the back of strengthening sentiment from the sell-side and proprietary trading firms.

For some, however, particularly asset managers, the sharp market falls experienced during the quarter came as an unwelcome development and fears for market performance for the rest of the year dented confidence.

It adds that Q3 2024, as with many quarters over the past five years, saw outbreaks of extreme volatility, which peaked in early August, driven by a variety of factors ranging from rate rises in Japan, concerns about US and Chinese growth and ongoing conflicts in Israel and Ukraine.

The market moves drove volume spikes in fixed income and equity options volumes. August saw the second higher monthly volumes in VIX options with 26.1m contracts traded during the month, surpassing the previous record set in February 2018. These volumes boosted sentiment across company types whose performance is closely tied to volume, Acuiti says, however, for directional firms, such as certain hedge funds and asset managers (and increasingly some proprietary trading firms), the sharp market moves caught out some firms.

“Overall, however, 2024 is shaping up to be another record year for volumes across the global derivatives market and sentiment generally remains positive,” the report states.

Back calculations of the Index indicate that Q1 2024 was the high mark at 69%, while Q4 2023 was the lowest at 57%. Q3 2023 saw the index at 64%, while Q2 2024 was 65%.