Singapore Dollar ETF Rises on Sibor Proposal
The brand new CurrencyShares Singapore Dollar Trust (NYSE: FXSG) is trading modestly higher today on heavy volume following news that the Monetary Authority of Singapore and some global banks are mulling a plan to scuttle U.S. dollar Singapore interbank offered rate, or Sibor.
The news was originally reported by the Wall Street Journal.
The CurrencyShares Singapore Dollar Trust, which debuted last week, higher by 0.14 percent on volume of over 39,100 shares. Heading into the start of trading Tuesday, FXSG had seen average daily turnover of just 433 shares.
Attempts to scrap Sibor would have a limited impact in Singapore due to the vehicle's narrow use and declining trade, the Journal reported, citing analysts and bankers familiar with the situation. On Monday, Singapore reported that exports rose just 0.5 percent in January, well below the 3.3 percent analysts expected.
Exclusive of the Sibor news, FXSG, the first ETF to track the Singapore dollar, could prove useful for investors looking for non-U.S. dollar exposure. Singapore has become one Asia's financial hubs, offering geographic exposure to scores of fast-growing emerging markets without being a developing market itself. Major index providers such as MSCI (NYSE: MSCI), Russell Investments and Standard & Poor's classify the city-state as a developed market.
Additionally, FXSG offers a play on the currency of one just two AAA-rated countries in the Asia-Pacific region. Australia is the other.
FXSG, which charges 0.4 percent in fees per year, has already attracted nearly $8.1 million in assets under management, according to the ETF's web site.
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