Hedging Spot Fuel Oil in Singapore: Will the New Simex Contract Succeed
We assess SIMEX's new market for fuel oil futures by examining its effectiveness in hedging a cash fuel oil position in Singapore. We find that the SIMEX contract can eliminate about two-thirds of the volatility of a Singapore cash position and is many times more effective than a cross-hedge constructed with overseas contracts. Given its potential usefulness as a hedging tool for the regional petroleum industry, we anticipate that the new contract will be a success.
Asia Pacific Journal of Management
Bailey, Warren and KOH, Annie.
Hedging Spot Fuel Oil in Singapore: Will the New Simex Contract Succeed. (1990). Asia Pacific Journal of Management. 7, (2), 97-107. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/1424