The National Stock Exchange (NSE) and Qatar Exchange are exploring opportunities to enhance cooperation between the two bourses and also work out a business plan. Currently, Financial Technologies (FT), the promoter of the MCX group has a presence in the region through a 44 per cent stake in Dubai Gold and Commodity Exchange (DGCX), which is emerging as one of the key exchange platforms for trading rupee-dollar contracts outside the country.
NSE’s chief executive officer (CEO) Ravi Narain on Tuesday met top officials of Qatar Exchange and briefed them about facilities that the Indian bourse offers to foreign investors. The deputy CEO of Qatar Exchange, Rashid Bin Ali Al-Mansoori stressed on the desire of Qatar Exchange to enhance cooperation between the two bourses through introducing appropriate mechanisms to provide local and foreign investors with better services in both markets, said officials present in the meeting.
Narain too stressed on the necessity to overcome all the obstacles that prevent mutual cooperation between the region’s markets and said his tour in the region was aimed at identifying difficulties of foreign investments in NSE.
There is a race among Indian exchanges for global alliance, as all the top bourses are banking on over the counter derivatives market to be moved to the exchange platform in the next five years. The non-deliverable forward market for rupee-dollar contracts alone is estimated to be more than $60-70 billion in Singapore, Europe and the US.
While the MCX-SX inked a tie-up with global index provider FTSE, NSE went ahead and tied up with the London Stock Exchange (LSE). Later, the LSE became the largest shareholder of FTSE. London-based FTSE is an independent company, managing over 200,000 equity, bond and alternative asset class indices. One of Europe’s key equity index FTSE 100 is now traded on NSE but LSE's tie-up with the former exchange is non-exclusive, say experts.
In the US the NSE has partnered with the Chicago Mercantile Exchange (CME), a rival of NYSE Euronext group. The latter holds five per cent stake in MCX-SX. In Asia, NSE has a tie-up with the Singapore Stock Exchange (SGX), which competes with the Singapore Mercantile Exchange (SMX). Again, the SMX is promoted by the Jignesh Shah-led FT group.
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NSE's tie-up with CME group helps it increase its reach as the latter has ties with Brazil’s Bolsa de Mercadorias & Futuros, Bovespa, Bursa Malaysia, Dubai Mercantile Exchange, KRX Exchange of Korea, Paris Bourse SBF SA, Montreal Exchange, Spain’s MEFF and SGX. The members of all these exchanges get several trading privileges in terms of direct access and cross-margining. For instance, CME positions in Nifty futures can be offset on SGX and vice versa. Also, OneChicago, the electronic platform which is a joint venture of IB Exchange Corporation, the Chicago Board Options Exchange and CME, is a unique example, as members of three owner exchanges are automatically members of OneChicago and there are no separate membership fees for trading.
The Bombay Stock Exchange (BSE) has maintained close ties with the Deutsche Borse, which also holds a five per cent stake in the Mumbai based exchange. Deutsche Borse is known for its proximity to the NYSE Euronext group. In Asia, BSE has tied-up with the Hong Kong Stock Exchange, which has an ambition like SGX to become the region’s gateway for foreign funds.
In the meeting on Tuesday, Narain said he was confident that the ongoing bilateral relations will prove to be a useful instrument not only to further strengthen the level of cooperation between the two exchanges, but also to open new areas of business opportunities for the market participants, both in Qatar and in India.