Nse Plans Nifty Futures Listing On Simex

The National Stock Exchange (NSE) plans to introduce the NSE-50 (Nifty) futures in the Singapore International Mone-tary Exchange (Simex).

However, talks are still in the preliminary stages and a final decision is expected within three months. Commenting on the issue, NSE managing director, R H Patil said, "Simex interest has increased after the joint venture with Standard & Poor's (S&P). However, we would like trading to start first start in India and later on in other places."

The NSE had recently entered into a joint venture with the international credit rating agency Standard & Poor's, for its index business.

Apparently, the exchange has transferred all its indices to the new joint venture company. Simex has shown an inclination towards introducing the NSE-50 as an index future contract on its exchange. At the last Invest India Conference in December 1997, Rama Pillai, vice president, head of business development, Simex, had said that the exchange would be keen on trading in futures on NSE-50 (Nifty), once permission was granted by the NSE.

 

If launched, it will be the first official Indian derivative contract to be traded anywhere outside the country.

The other major outstation index contracts that are being traded in Simex are the Nikkei 225 futures and options, Nikkei 300 futures and options and MSCI Taiwan Index futures and options.

Simex is the world leader in futures trading on the Japanese Nikkei-225 index. On account of delays and regulator restriction in Japan, trading on Nikkei had shifted to Simex.

Once Nifty is introduced in Simex, the NSE will find it difficult to bring in the volumes necessary to sustain the product. As most of the FIIs who operate in India have access to both these markets, they can resort to inter-exchange arbitraging which will further improve the local market.