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Singapore Exchange to launch new Indian derivatives before NSE deal ends

SGX has become the most popular way for foreign investors to bet on Indian equity indexes

Reuters  |  Singapore 

Singapore Exchange, SGX, SGX Nifty, NSE
The Singapore Exchange offices in Singapore | Photo: Reuters

Ltd (SGX) said on Monday it will launch successor products to its flagship Indian equity index derivatives before the bourse's licence agreement with the of India (NSE) expires in August 2018.

The move comes days after India's three main bourses unexpectedly announced they would stop licensing their indexes to overseas exchanges, which hit SGX's shares as brokers cut the bourse's earnings estimates.

"Our successor products will provide certainty and continuity for our clients. At the same time, we continue to work with to create a larger pool of liquidity comprising international and home market participants," Michael Syn, head of derivatives at said in a statement.

Over the past two decades, has become the most popular way for foreign investors to bet on with tracking the NSE's main index.

"We view the announcement of the successor products to Nifty family of products as a positive development to the chain of events which unfolded last week," analysts at DBS Group Research said in a report on Monday.

"The successor products, though not as well-established as the Nifty family of products, will continue to allow access into Indian and feed demand for Indian offshore products," DBS Group Research said.

SGX's Indian equity derivatives products account for about 12 percent of its total derivatives trading volume. Over the last few years, the exchange has rapidly expanded its suite of derivatives that have helped to power growth in earnings while its cash equities business weakened.

Last week, global index provider Inc "strongly" suggested to the Indian exchanges and their regulator that they reconsider their "anti-competitive measures."

said that along with the NSE, it will also develop a link that will allow global market participants to trade on NSE's international exchange in the western Gujarat state, where India is developing a new financial centre and offering dollar-based derivative contracts and lower taxes.

First Published: Mon, February 19 2018. 23:03 IST