PhillipCapital, IG and CMC Markets continue to lead Singapore FX and CFD market

Global research house Investment Trends has publicly released its 2016 Singapore CFD & Singapore CFD & FX Report, an in-depth analysis of Singapore OTC de FX Report rivative traders’ attitudes and investing habits based on a large-scale survey of more than 13,000 Singaporean investors concluded 3,000 in August 2016.

Some of the key features were:

Trader numbers declined, as intense volatility proved too much for many

Retail participation in CFD and FX trading declined substantially in the past 12 months. An estimated 22,300 Singaporean traders placed at least one trade on either CFDs, FX or both during the year, down from 24,500 in 2015.

Dr Irene Guiamatsia, Research Director at Investment Trends

Dr Irene Guiamatsia, Research Director at Investment Trends

The Singapore retail CFD and FX market shrank, halting the enthusiasm generated after last year’s revival,” said Dr Irene Guiamatsia, Research Director at Investment Trends.

Despite the grim outlook on equities and sustained bouts of market instability, many Singaporean traders decided to sit it out.

Nearly one in two previously active traders did not place any trade over the course of the year, suggesting the level of volatility was too great for their appetite. This large number of traders going dormant outweighed new client inflows, resulting in the contraction.

Looking at individual product segments, CFDs saw a rather sharp contraction while the FX trading segment actually managed to hold its own.

The largest brokers are gaining ground, yet the market is becoming increasingly crowded 

PhillipCapital continues to lead the overall market, while IG, CMC Markets and OANDA have narrowed the gap in recent years. Alongside these international brands, Interactive Brokers also saw their share of the pie grow in the past year.

The largest brokers are successfully maintaining their strong position in the market, and they are growing,” said Guiamatsia. “This is in line with the flight to quality that has been witnessed globally in the aftermath of the Swiss Franc crisis.

Despite the concentration at the top, many new brokers have managed to infiltrate the FX trader segment. One in seven FX traders placed a trade through brokers that have only recently appeared to participate in the market. Interestingly, most of these clients also ensure they have additional accounts with local brokers as a risk mitigation measure.

Switching activity dropped to a record low, steering the competitive focus to new traders

Only 7% traders switched from a CFD/FX broker to continue trading with another. This is nearly half of the level observed a year ago when the market was growing at rapid pace. Singapore now has the lowest level of attrition due to switching among the eight markets currently covered by Investment Trends.

Increasing customer loyalty is the outcome of a combination of factors, and certainly a testament of high client satisfaction levels across the industry,” said Guiamatsia.

Each year, Investment Trends recognises the best performers in select categories, as per their client satisfaction ratings. The following brokers received the highest ratings for key service elements:



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