NSE arm India Index Services and Products (IISL) today said it will soon launch Indian sector-specific index futures contracts on Singapore Exchange.
"This is the first time that derivatives on Indian sector indices are being launched outside India," NSE said in a statement.
Singapore Exchange (SGX) would list four US dollar- denominated index futures contracts based on IISL's sector indices.
These contracts would include SGX Nifty Bank Index Futures, SGX Nifty IT Index Futures, SGX Nifty CPSE Index Futures and SGX Nifty Midcap 50 Index Futures.
While SGX Nifty IT Index Futures and SGX CPSE Index Futures would be launched on March 29, the SGX Nifty Bank Index Futures and SGX Nifty Midcap 50 Index Futures will be listed in mid-2016.
"The introduction of sector index futures contracts will deepen SGX's Indian product offering and provide offshore investors access to specific trading opportunities in the key growth sectors of the world's fastest growing economy," NSE said.
At present, SGX Nifty 50 Index Futures is the flagship Indian equity derivative product on the Singapore-based bourse.
SGX Nifty 50 Index Futures is based on IISL's primary Indian equity benchmark Nifty 50 Index and is widely used by international market participants to gain offshore exposure to the performance of the Indian equity market.
Volumes in this product rose by nearly 30 per cent year-on-year during 2015 to USD 360 billion. SGX's INR/USD futures contract is also SGX's most active FX futures contract with more than USD 750 million notional traded per day, NSE said.
"India's economic growth, unique demographic profile, foreign direct investments and government initiatives are helping to drive the banking and IT sectors, as well as supporting the growth of public sector and mid-cap companies," said Chitra Ramkrishna, managing director and CEO, NSE.
"Derivatives on these new sector indices will provide useful tools for offshore investors to benefit from these trends and also to manage market movement," she added.
SGX CEO Loh Boon Chye said, "The continued success of our existing India-linked risk management products is a testament to offshore demand from investors to access the India opportunity as well as SGX's ability to pioneer offshore derivative contracts.
