Singapore bourse SGX and India’s National Stock Exchange (NSE), two of Asia’s largest trading venues, are scripting a new chapter in their partnership. SGX may pick up a stake in NSE’s GIFT (Gujarat International Finance Tech-city) exchange, known as NSE IFSC, two sources told BusinessLine .

India is promoting GIFT as an answer to Singapore and Dubai, which attract huge foreign trading interest in Indian products due to easier regulatory and tax requirements. GIFT has been fully operational since last year but has failed to gain traction overseas.

Recently, the NSE and BSE withdrew from licensing agreements they had with SGX and Dubai’s DGCX, respectively, for trading in their key indices Nifty and Sensex.

Since then both SGX and NSE have been trying to reconcile and an investment in GIFT could bring the two together again.

“NSE could offer SGX a stake in GIFT. If SGX has not raised a ruckus over abrupt disruption of an age-old partnership, it is only as another lucrative deal could be in the offing. Also, SGX wants to pacify negative public sentiment in India,” one of the sources said.

A big deal

NSE’s Nifty index is among the world’s largest traded derivative products and was in high demand on the SGX. The Nifty and other India products gave SGX over 12 per cent of total derivative volume and a huge chunk of fee income.

SGX is recognised globally for being a gateway to Asia. After the NSE move, SGX’s share price crashed 9 per cent in a single trading session this month, which was the biggest move for the stock since 2008.

MSCI warning

Domestic exchanges and regulators are concerned over the dire warning issued by MSCI, which said the move to restrict access to data was anti-competitive. MSCI said India, currently clubbed with emerging nations, could see a change in its market classification as a consequence.

But NSE believes it can bring back lost trading volumes if it promotes the GIFT platform with SGX.

NSE did not reply to an email. SGX said it will not add to what it had said earlier about working with NSE in GIFT to create new products.

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