Nifty50 breaches 10,900-mark
mumbai — The National Stock Exchange of India Ltd, operator of the country’s biggest bourse, is asking Singapore Exchange Ltd to delay the planned introduction of singlestock futures that would track some of the subcontinent’s largest companies, according to people familiar with the matter.
NSE’s request comes as domestic stock-derivatives volume has slipped, said the people, who asked not to be named because the talks are private. While SGX has informed some of its clients of a possible February 5 launch, subject to regulatory approval, NSE is seeking the delay to buy it time as it attempts to arrest the slide back home, the people said. India’s budget on February 1 may offer some incentives for exchanges and foreign investors, the people said without being more specific.
SGX and NSE have a licensing agreement that allows futures and options based on the benchmark NSE Nifty 50 Index to trade in Singapore, though existing products track indexes and sectors and not individual shares. The issue hasn’t stopped the two exchanges from discussing partnering on other matters, the people said.
The number of Nifty 50 contracts traded at SGX in December was eight per cent higher than in June, according to exchange data. In July, India’s regulator instituted a crackdown on foreign access to the country’s derivatives market. The Dubai Gold and Commodities Exchange, the Middle East’s largest derivatives bourse, offers offshore Indian singlestock contracts.
“SGX is continuously in dialogue with market participants to assess the demand for risk management products,” the exchange operator said in an emailed response to questions. “As a highly liquid, offshore risk management center, SGX remains committed to complementing the primary domestic market for hedging of Indian equity exposures.”
An NSE spokesman in Mumbai declined to comment. A finance ministry spokesperson didn’t immediately respond to text messages or calls.
SGX shares fell 0.3 per cent at the open in Friday’s trading. — Bloomberg