Heightened global interest in Eurex’s Sensex F&O

An increasing number of institutional investors are looking to dabble in Eurex-listed Sensex futures and options in the wake of a surge in trading volumes linked to the BSE benchmark index, Borse Group Executive Director, Mr Roland Schwinn, has said.

“We have also started developing market-makers among the India-origin companies operating out of Dubai and Singapore,” he told PTI here today, pointing out the potential of participation by the Eurex’s 431 members in 30 countries and 8,357 registered traders.

“Our institutional investors out of the United States, Europe and Asia will sooner or later want to have exposure in India and we see contracts under Eurex’s Sensex futures and options a big opportunity for them,” said Schwinn.

Sensex futures and options, which were launched on the Eurex late last year, are the leading Indian market tools for international institutional investors, banks and hedge funds, he elaborated.

Though international investors face limitations due to restrictions on direct access to the Indian stock and share markets, Sensex futures and options would attract indirect investors, he said.

“Sensex is a very strong brand and tracks the daily performance of the 30 largest and most actively traded companies listed on the Bombay Stock Exchange (BSE) and we are working to build its volume in the global market, which will be supported by the pick-up in BSE volumes,” he said.

The Sensex’s daily volumes have increased significantly to over 43,000 contracts in recent trading sessions following the launch of the BSE’s rebate-based, trade-boosting Liqiuidity Incentives Scheme in late October.

“We are in partnership with the BSE and committed to make Sensex futures and options the main choice of trading for and with the Indian markets,” he said, highlighting the need to nurture such specific contracts for the longer term.

The Eurex’s commitment to Sensex futures and options is backed by parent Deutsche Borse Group’s 5 per cent stake in the BSE as part of the Zurich-based bourse’s global expansion plans.

Sensex futures and options would be driven in the coming years by Indian companies based outside the country, especially those operating out of Dubai and Singapore, said Mr Schwinn.

“We have an increasing number of Dubai and Singapore-based companies expressing interest in the Sensex futures and options that will lift the interest internationally,” added Mr Henk Huitema, Deutsche Borse Group’s Head of Singapore Branch, with responsibility for South Asian and Middle East markets.

Stock and share markets are expected to come under pressure from the euro zone crisis, but new products — including Sensex futures and options — would be opportunities to lock into Asia-supported investments, Mr Huitema said.

“We also see more and more Indian firms looking into direct memberships of Eurex,” he said.

Backing its drive to introduce international product trading in the Indian markets, Deutsche Borse has started training Indian traders on dealing in European and Asia products, as well as managing risks.

Since April this year, it has held training sessions in Kolkata and Mumbai.

“We are expanding our pool of trainers, who are experienced traders and university lecturers,” he said.

Deutsche Borse is also seeking cooperation with Indian universities and technical institutions to increase the local base of trainers.

Separately, Deutsche Borse has this month created an Indian market-dedicated position to develop business in the products market, as well as build its trader-customer base.

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