NSE and SGX to launch the world’s first offshore Indian sector futures

March 15, 2016 09:31 AM

India Index Services & Products Limited (IISL), a National Stock Exchange (NSE) group company, and Singapore Exchange (SGX) announced their intention to introduce futures on Indian sector-specific index futures on SGX.

This is the first time that derivatives on Indian sector indices are being launched outside India.

SGX will list four USD-denominated index futures contracts based on IISL’s sector indices, specifically the SGX Nifty Bank Index Futures, SGX Nifty IT Index Futures, SGX Nifty CPSE Index Futures and SGX Nifty Midcap 50 Index Futures.

The introduction of sector index futures contracts will deepen SGX’s Indian product offering and will provide offshore investors access to specific trading opportunities in the key growth sectors of the world’s fastest growing economy.

Ms. Chitra Ramkrishna, Managing Director and CEO of NSE, said, “We are pleased to extend our relationship with SGX and support the expansion of SGX’s Nifty product suite. This is aligned with the continued participation of foreign portfolio Investors in India. India’s economic growth, unique demographic profile, foreign direct investments and government initiatives are helping to drive the banking and IT sectors, as well as supporting the growth of the public sector and mid-cap companies. Derivatives on these new sector indices will provide useful tools for offshore investors to benefit from these trends and also to manage market movement.”

SGX’s flagship Indian equity derivative product, the SGX Nifty 50 Index Futures, is based on IISL’s primary Indian equity benchmark Nifty 50 Index and is widely used by international market participants to gain offshore exposure to the performance of the Indian equity market. Volumes grew 30% year-on-year during 2015 to USD360 billion. SGX’s INR/USD futures contract is also SGX’s most active FX futures contract with more than USD750 million notional traded per day.

Loh Boon Chye, CEO of SGX, said, “The continued success of our existing India-linked risk management products is testament to offshore demand from investors to access the India opportunity as well as SGX’s ability to pioneer offshore derivative contracts. We will continue to be innovative in facilitating investor participation in India and we thank NSE for its continued partnership, which has been important for our ability to help internationalise the Nifty brand.”

The SGX Nifty IT Index Futures and SGX CPSE Index Futures will launch on 29 March 2016, followed by the SGX Nifty Bank Index Futures and SGX Nifty Midcap 50 Index Futures in mid- 2016.

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