Energy Product Derivatives - Malaysia

Malaysia

Highlights

The nominal value in the Energy Product Derivatives market is projected to reach US$51.94bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 5.41% resulting in a projected total amount of US$67.59bn by 2029.
The average price per contract in the Energy Product Derivatives market amounts to US$0.02 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached United States (US$26.91tn in 2024).
In the Energy Product Derivatives market, the number of contracts is expected to amount to 2.86m by 2029.

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

Amidst the growing demand for energy product derivatives in Malaysia, customer preferences are shifting towards more diverse investment options in the financial market. Customers are increasingly looking for ways to hedge against price fluctuations and manage risk in their portfolios, leading to a surge in the trading of energy product derivatives.

Customer preferences: In Malaysia, customers are showing a growing interest in energy product derivatives as they seek to diversify their investment portfolios and mitigate risks associated with price volatility. With the global energy market experiencing fluctuations due to geopolitical events and supply-demand dynamics, customers are turning to derivatives as a way to hedge their positions and capitalize on market movements.

Trends in the market: One of the key trends in the energy product derivatives market in Malaysia is the increasing participation of institutional investors. Institutional players such as hedge funds, asset management firms, and pension funds are actively trading energy derivatives to gain exposure to this lucrative market. This trend is driving liquidity and adding depth to the market, making it more attractive for retail investors as well.

Local special circumstances: Malaysia's strategic location in the Southeast Asian region positions it as a key player in the energy market. The country's robust regulatory framework and well-developed financial infrastructure make it an ideal hub for trading energy product derivatives. Additionally, Malaysia's growing economy and stable political environment attract foreign investors looking to tap into the potential of the energy market.

Underlying macroeconomic factors: The growth of the energy product derivatives market in Malaysia is also influenced by broader macroeconomic factors such as global energy prices, economic growth, and regulatory changes. As Malaysia continues to strengthen its position as a leading financial center in the region, the demand for energy derivatives is expected to rise further. Moreover, the government's initiatives to promote capital market development and attract foreign investment play a significant role in shaping the future of the energy derivatives market in the country.

Data coverage:

Figures are based on commodity derivatives, their notional value, the number of contracts traded, the open interest (outstanding contracts at the end of a year), and the average value of a contract.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data of World Bank, as well as the World Federation of Exchanges. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus such as GDP, wealth per capita, and the online banking penetration rate. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita an the online banking penetration rate.

Additional Notes:

The market is updated twice per year in case market dynamics change.