The Hindu Business Line : SGX cuts contract size of Nifty Futures to $2

Kolkata, Nov. 19 Singapore Exchange Ltd (SGX) has reduced the contract size for the SGX Nifty India Index Futures from $10 to $2 from Monday. The SGX has, however, increased the position limit to 25,000 contracts from 5,000. The minimum lot size has gone up from 10 to 100.

According to SGX, these measures “have been taken to meet different risk and investment needs” of its market retail, institutional participants and traders as also “to allow greater affordability and tradability”.

SGX has also reduced contract size for the SGX FTSE/Xinhua China A50 Index Futures, effective from Monday. The new contract will provide margin savings in the form of inter-commodity spreads for SGX equity contracts between the CNX Nifty Index and MSCI Taiwan Index, Nikkei 225 Index, and MSCI Singapore futures contracts.

Volumes

Since October, Indian index has been attracting added interests. Volumes for Nifty futures contract suggest that it peaked in October from the low volumes in April. In October it recorded a volume of 22,645 against 12,408.

The average monthly volume is paltry compared to Nikkei 225 or Taiwan index futures contracts on the Singapore exchange.

The current open interest in SGX CNX Index futures for November is 45,350, while for December it is 3,055. In October it had an open interest of 6,890. The highest open interest this year was witnessed in March at 48,198.

CNX Nifty Index

The CNX Nifty Index, compiled by the India Index Services & Products Ltd (IISL) — a joint venture between the NSE and CRISIL Ltd (formerly the Credit Rating Information Services of India Ltd) — is a well diversified market capitalisation weighted index comprising 50 large and highly liquid securities traded on the NSE.

The Nifty index covers about 23 sectors of the economy and approximately 60 per cent of the total market capitalisation of the underlying India bourse.

The Singapore Exchange Derivatives Trading Ltd (SGX-DT) was the first market in Asia to list equity index futures. Over the years, its range of Asian equity futures and options has expanded to include Japan, Taiwan, India, Hong Kong and Singapore.

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