It will be business as usual for Indian products: SGX

PALAK SHAH Mumbai | Updated on February 11, 2018 Published on February 11, 2018

The SGX reiterated and reassured international traders of its Indian product trade from Monday.   -  Reuters

The war between Indian and foreign bourses seems to be intensifying, with SGX, Singapore’s bourse, making plans to develop a new India equity derivative product.

This announcement comes after the National Stock Exchange (NSE) said it was stopping trading of its Nifty index on the SGX.

“SGX will develop and launch new India-access risk management solutions to allow global participants in the SGX India equity index family of derivative products to execute their investment activities with continuity. The details will be announced shortly,” SGX said in a statement.

On Friday, Indian stock exchanges said they had decided to stop sharing data to bourses in Singapore and Dubai.

No immediate impact

Investors, however, said that the development may not have any impact immediately. SGX’s licence agreement with the NSE will ensure the continuity of listing and trading of the former’s Nifty suite of derivative products till August 2018, at a minimum. “The market for our entire India suite of products, including Nifty, will open and operate per normal on Monday, 12 February 2018,” SGX said in a statement.

SGX will work jointly with the NSE towards solutions for global investors, including developing solutions from NSE’s International Exchange (NSE IFSC Limited) in the GIFT city International Financial Services Centre.

There is a belief that apart from SGX working on GIFT-linked products, the exchange would promote its India linked exchange-traded funds (ETFs) and develop more such products to keep trader interest intact on its platform.

Grabbing the spotlight

India-linked ETFs were already grabbing the spotlight on the SGX. The exchange has four Indian ETFs: db x-trackers MSCI India Index UCITS ETF, Lyxor ETF MSCI India, iShares MSCI India Index ETF and db x-trackers CNX Nifty UCITS ETF.

Three of the four track the MSCI India Index, while the fourth tracks the Nifty 50 Index. They were among the top performing ETFs in 2017, averaging a total return of over 20 per cent. Their one-year and three-year return stood at more than 30 percent and 40 per cent, respectively. iShares MSCI India Index ETF (I98) is the most active Indian ETF on the SGX.

Foreign traders even believe that India’s recent move may not hurt trading of single stock futures (SSFs) on the SGX and Dubai Gold and Commodity Exchange (DGCX) as no data feed from the Indian exchanges is required. Both the exchanges had recently launched derivative trading in SSFs in large stocks that are key constituents of the Nifty.



Published on February 11, 2018
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