Active Stocks
Fri May 24 2024 15:59:27
  1. Tata Steel share price
  2. 174.80 -0.37%
  1. NTPC share price
  2. 374.85 0.68%
  1. State Bank Of India share price
  2. 828.60 -0.45%
  1. ITC share price
  2. 436.10 -1.16%
  1. Power Grid Corporation Of India share price
  2. 318.50 -0.39%
Business News/ Markets / Mark To Market/  Investors still look wary of NSE-SGX connect in GIFT City
BackBack

Investors still look wary of NSE-SGX connect in GIFT City

Since the NSE-SGX dispute began over a year ago, outstanding positions in SGX’s Nifty futures contract have more than halved
  • Reports of NSE and SGX signing a new sort of collaboration involving GIFT City haven't brought much comfort either
  • Open interest of NSE’s near-month Nifty futures contract has fallen by about 30%. (Abhijit Bhatlekar/Mint)Premium
    Open interest of NSE’s near-month Nifty futures contract has fallen by about 30%. (Abhijit Bhatlekar/Mint)

    Voting with the feet may be a tiresome affair, but investors never tire of resorting to it when faced with uncertainty on the regulatory front.

    A case in point is the back and forth between the National Stock Exchange (NSE) and Singapore Exchange (SGX) on the fate of the Nifty futures contract listed at Singapore. Since the drama began a little over a year ago, outstanding positions in SGX’s Nifty futures contract have more than halved. If its Indian counterpart thought that investors exiting SGX would migrate to NSE, they were gravely mistaken. Open interest of NSE’s near-month Nifty futures contract has fallen by about 30%.

    View Full Image
    (Naveen Kumar Saini/Mint)

    Reports that the two exchanges are very close to signing a new sort of collaboration, involving NSE’s fledgling international exchange at GIFT City, haven’t brought much comfort either. Outstanding positions are down about 26% on SGX from July, which is when the exchanges and their regulators said a new agreement was being worked upon.

    Perhaps, given the bad blood between the two exchanges, they would rather wait and look for concrete steps, as well as proof that the proposed new structure can work seamlessly.

    If the connect works, it may help boost volumes at GIFT City, but that may be an optical boost at best. Given India’s regulatory flip-flops, it looks unlikely that foreign traders will leave markets they are accustomed to and set up shop in India’s so-called international exchanges.

    In this instance, they would continue to post orders and collateral with SGX, which will then send them across to the GIFT City venue. If this was the little victory the Indian side was chasing, it begs the question whether the disruption of a well-functioning market was necessary.

    You are on Mint! India's #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!

    Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
    More Less
    Published: 20 Feb 2019, 04:04 AM IST
    Next Story footLogo
    Recommended For You
    GENIE RECOMMENDS

    Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

    Let’s get started