Hopes to draw on LSE’s expertise in small and medium enterprise segment.
The options contract of India’s top equity benchmark index – S&P CNX Nifty of the National Stock Exchange (NSE) – could soon be listed on one of Europe's largest stock exchange, the London Stock Exchange (LSE). The managements of the two bourses on Wednesday signed a deal to evaluate future business opportunities between them.
Outside India, Nifty futures contracts are traded on the Chicago Mercantile Exchange (CME) and the Singapore Stock Exchange (SGX).
The benchmark index of NSE’s rival, the Bombay Stock Exchange's Sensex, is already slated to be listed on the Deutsche Bourse and will start trading from October. The Sensex comprises 30 companies. Sources in the exchange said it is in talks to list the Sensex on other European exchanges, too.
In NSE's case, according to the Letter of Intent, both the exchanges will explore the possibility of having an agreement whereby the FTSE Group may license the FTSE 100 Index to NSE, while the domestic bourse may license its benchmark Nifty-50 to LSE for trading. LSE owns 50 per cent in the FTSE Group, a leading provider of market data and index.
“Currently, only Nifty Options will be listed on LSE and, at a later stage, it could be more than that,” said Ibukun Adebayo, LSE’s head of primary market division in India and international business development officer.
NSE Joint Managing Director Chitra Ramakrishnan said the exchange was confident that the Letter of Intent with the LSE would open up new investment opportunities for Indian investors and expand the bouquet of investible instruments that the NSE platform provides. "We also hope to draw upon the expertise of LSE in the small and medium enterprise segment (SME) for the benefit of Indian SMEs and investors," she added.
The agreement was signed by LSE's Chief Executive Xavier Rolet and NSE's Ramakrishnan in the presence of UK's Chancellor of Exchequer George Osbornse, who is leading a high-profile British business delegation to Mumbai.
The Nifty covers about 23 sectors of the Indian economy and over 60 per cent of the total market capitalisation of the underlying bourse.
LSE has been making persistent attempts to revive its derivatives trade. At present, LSE's derivatives operations are centred around Italian exchange IDEM and its London-based Russian derivatives exchange EDX.
