In its continuing assurances to traders, Singapore Exchange today said its entire India suite of products, including Nifty, will open and operate per normal tomorrow. The SGX reiterated and reassured international traders of its Indian product trade from tomorrow.

This comes after the Indian Exchanges on February 9 announced a decision to stop the commercial licensing of their indices and market data with a number of foreign exchanges and other business partners. “SGX wishes to assure market participants that we will take all measures to maintain orderly trading and clearing of SGX India equity derivatives for our global clients,” the Singapore bourse said in a statement today.

“The market for our entire India suite of products including Nifty will open and operate per normal on Monday, 12 February 2018. Our licence agreement with NSE will ensure the continuity of listing and trading our Nifty suite of derivative products till August 2018 at a minimum,” said SGX in the statement.

As Asia’s leading risk management centre and clearing house, global market participants rely on SGX to access multiple markets and asset classes around the region, said the statement. “We are committed to provide a commercially sustainable suite of solutions for our clients to manage their portfolio risks efficiently across markets and time-zones,” it elaborated.

The SGX said it will develop and launch new India-access risk management solutions to allow global participants in SGX India equity index family of derivative products, to execute their investment activities with continuity. The details will be announced shortly. “SGX and NSE (National Stock Exchagne) are long term partners and have collaborated since 2000 to develop and internationalise India’s capital markets,” stressed the statement.

The SGX said it will work jointly with NSE towards solutions for global investors, including developing solutions from NSE’s International Exchange (NSE IFSC Limited) in Gujarat International Finance Tech (GIFT) city — International Financial Services Centre. “The termination of this licence is not expected to have any material impact on SGX’s immediate financial results. Our product development efforts detailed above will support the delivery of longer term financial results,” said the exchange.

The SGX offers three families - Nifty family, MSCI family and Single Indian Stock of 50 companies in Nifty. The trading in the single stock began on 5 Feb 2018, which trade sources believe triggered the Indian Exchanges’ action. The SGX plans to increase its offer of this single stock futures contract of Indian top range listed companies hence on, responding to international market demand for trading in Indian companies’ stocks and shares. The Indian Exchanges announcement comes in a highly volatile market environment, which will make MSCI investors even more sensitive to changes like this, according to trading sources.

Most of the international interest in India, and inflows, comes through the MSCI Emerging Markets Index (MSCI EM) given MSCI India’s 9 per cent weightage within this index, according market reports. MSCI EM is the global EM benchmark consisting of 24 countries representing 10 per cent of world market capitalisation. It has USD 1.6 trillion in assets benchmarked to it. MSCI India has 79 Indian stocks; the top 10 names include HDFC, Reliance, Infosys, TCS, Axis Bank, Maruti Suzuki, ITC, Hindustan Unilever, ICICI Bank and L&T.

MSCI India is the most popular India index amongst institutional investors outside of India, with over US$9.2 billion in total AUM for MSCI India family ETFs (vs USD 150 million for Nifty ETFs). “If investors can’t hedge their EM exposure then this impacts the status of India within the MSCI EM Index,” said the sources.

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