The National Stock Exchange (NSE) is contemplating sector-specific indices aimed at investors who are keen to take advantage of the volatility in scrips of specific sectors such as pharmaceuticals, information technology among others.
Ravi Narain, managing director and chief executive officer, said once the indices are introduced, investors will be able to take more informed investment decisions as they would have more than one index to analyse the price movements and trends on the bourse.
Emphasising that a large cross-section of investors have time and again expressed an interest in such sectoral indices, Narain said over the last few years NSE officials have developed such products and have been testing them for their viability and efficacy.
Refusing to give a specific timeframe with regard to how soon such indices would be introduced, Narain said they have to be very carefully designed and have to be foolproof.
But once introduced, such indices would definitely serve the interests of investors wanting to maximise their returns from investing in scrips of only specific sectors. Such investors are quite focused and are also more comfortable with volatility, he elaborated.
Speaking about the increasing importance of derivatives trading, he said, "The derivatives market is ready for an explosive growth and is set the volumes are set to quadruple over the next couple of years. And in future growth in stock market volumes would be driven by derivatives trading as much of the product innovations will come in the derivatives market."
When asked how NSE can help regional exchanges tide over their current problems of lack of volumes, he said, "NSE is open to suggestions from regional exchanges with regard to how we can collaborate with them on this issue."
