Singapore Exchange (SGX) launched Singapore Depository Receipts (SDRs) for major US-listed companies in July, aiming to give Asian investors a convenient way to trade US shares during Asian market hours. But early data suggests the new products have yet to catch on.
According to a Reuters analysis, only $2.3 million worth of SpaceX SDRs changed hands from the launch through September 18. That's a tiny fraction of the trading volume the underlying stock sees on US exchanges, and it underscores the challenge SGX faces in attracting investors to a new format.
What are SDRs?
SDRs are essentially Singapore-dollar denominated units that track the price of an underlying foreign stock. They allow investors to buy and sell exposure to companies like SpaceX, Grab, and Sea during Asian trading hours, without having to convert currency or open a US brokerage account. The idea is to offer a local, regulated way to access popular US names.
SGX's first batch of US-linked SDRs, listed in July, included shares of ride-hailing and delivery firm Grab, e-commerce and gaming company Sea, and SpaceX, the private space exploration company. The move was part of SGX's broader effort to inject more life into a stock market that often feels overshadowed by Singapore's status as a global financial hub.
Early trading volumes are thin
The Reuters data shows that Grab and Sea SDRs saw about $24 million in trading over the same period. That sounds like a decent number, but it pales in comparison to the roughly $26 billion those stocks trade in the US. For SpaceX, the $2.3 million figure is even more striking, though it's worth noting that SpaceX is not publicly listed on a traditional exchange—its shares are only available through private markets, so the SDR offers a rare way for retail investors to get exposure.
Why the slow start? Market participants point to a few likely reasons. First, many investors already have access to US stocks through their existing brokers, especially with the rise of zero-commission trading apps that allow fractional shares. Second, the SDRs are new, and investors may be waiting to see how liquidity develops before diving in. Third, there's the question of familiarity—most retail investors are used to buying US stocks directly, not through a depositary receipt structure.
What it means for investors
For everyday investors, the quiet debut is a reminder that new financial products often take time to gain traction. The low volumes mean wider bid-ask spreads and potentially higher trading costs for those who do use SDRs. It also means that if you're considering SDRs, you should weigh the convenience of Asian-hours trading against the potential for less favorable pricing compared to trading the US-listed shares directly.
That said, the SDRs could still find their footing. If SGX adds more popular US names, or if trading volumes pick up as more investors learn about the product, the liquidity could improve. For now, though, the early numbers suggest that most investors are sticking with the routes they already know.
Broader context
SGX's push into US-linked products comes as Asian exchanges compete for a slice of the global trading pie. Hong Kong has long been the region's gateway to international stocks, but Singapore has been trying to position itself as a complementary hub, especially for Southeast Asian companies and investors.
The launch also taps into a growing demand for US tech and growth stocks among Asian retail investors. Companies like Grab and Sea are household names in the region, and SpaceX has a strong following among space enthusiasts and tech investors. But as the early data shows, demand doesn't automatically translate into trading volume.
Investors will be watching to see whether SGX expands its SDR lineup or introduces incentives to boost liquidity. In the meantime, those interested in US stocks during Asian hours still have plenty of options, from US-listed ADRs to international trading accounts.
For more on regional market moves, check out our coverage of Hong Kong stocks staying flat and Indian stocks edging up. And for a look at how companies are navigating market challenges, see Grab's CEO buying shares after a rough patch.
