Singapore Exchange Ltd held multiple calls with treasury officials from global banks about introducing futures tied to some Asian government bond markets, according to people familiar with the matter.

The bourse discussed introducing the futures for countries including India, Indonesia, Malaysia, Philippines and Thailand, the people said, asking not to be named discussing private matters. Such futures allow investors to hedge their exposure to interest-rate swings by buying or selling bonds at a later date on exchanges.

The discussions reflect the growing interest in the region’s debt markets. Indian bonds have been joining global indexes over the past year-and-a-half, while Malaysian securities were investor favorites last year, delivering the strongest performance in emerging Asia.  

“For bond futures to be successful, the underlying bonds must be liquid, and traders must be able to trade both futures and onshore bonds to maintain the relationship between the futures and the bonds,” said Rajeev De Mello, global macro portfolio manager at Gama Asset Management SA. “Traders will need the ability to short cash bonds, which is not always easy in some markets.”

For the proposed products, the SGX discussed offering three, five- and 10-year maturities per country, the people said. The futures would be settled in US dollars, with pricing based on average yield of a basket of no more than three sovereign bonds, they said.

For India, the bonds most likely to be considered would fall under the Fully Accessible Route framework, which make them eligible for inclusion in global indexes, the people said. Overseas investors have poured $21 billion into the nation’s sovereign bonds since they were added to JPMorgan Chase & Co’s flagship index in June 2024, according to clearing house data.

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SGX aims to introduce the futures in the first half of 2026, potentially as early as the first quarter, the people said, adding that the discussions are preliminary and details may change.

An SGX spokesperson declined to comment.

At present, the exchange offers Japanese government bond futures, Singapore overnight rate average futures and Tokyo overnight average rate futures, according to its website. The bourse has stepped up its offerings in recent months, as it looks to expand into new segments popular with investors such as crypto futures.