Move to revive lacklustre derivatives trading, say marketmen.
The Bombay Stock Exchange (BSE) would soon list the country’s premium benchmark index Sensex on the Singapore Stock Exchange (SGX).
Sources close to the development said that Asia’s oldest bourse has already signed an agreement with SGX to facilitate the listing. However, the date of listing is yet to be fixed, they added.
The NSE benchmark Nifty is already trading in the futures segment at SGX.
Market players are of the view that this move will revive the currently lack-lustre derivatives trading on BSE. As of now, over 90 per cent of derivatives business is cornered by NSE in the domestic market.
Meanwhile, BSE on Wednesday launched its currency futures platform. Talking on the occasion, the bourse’s chief operating officer (COO) M L Soneji said they were in talks with their Singapore counterpart to develop some index-based products.
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He also said the exchange would together work with Deutsche Borse to develop derivatives products.
With the launch of currency futures, BSE has become the second exchange in the country to offer trading in dollar-rupee futures after the National Stock Exchange (NSE) launched it on August 29 this year.
On the very first day of currency futures trading, BSE clocked a turnover of Rs 310 crore. And, NSE registered volumes of Rs 420 crore for the day.
Speaking at the same function, Securities and Exchange Board of India (Sebi) chairman C B Bhave said they were working in close coordination with the Reserve Bank of India (RBI) in assessing demands by market participants to relax restrictions on currency derivatives.
Currently, foreign institutional investors (FIIs) and non-resident Indians (NRIs) are not allowed to take exposure to the exchange-traded currency market. As a consequence, a major chunk of the volume in rupee futures is generated in Singapore’s unregulated non-deliverable forward (NDF) market.
While BSE’s entry into the segment would encourage healthy competition, Bhave said exchanges should not compromise on core principles. “There are certain core principles that are not capable of compromise and, therefore, it should not be subject to the spirit of competition,” he said.
The Sebi chief urged exchanges not to compete by giving “little bit of latitude” on margins or other things, which affect the sanctity of settlement.
Yet another exchange promoted by India’s top commodity exchange MCX SX would start currency futures trading from October 7.