With the Indian equity benchmark indices hitting new highs, the tradition of using the Singapore Stock Exchange Nifty, or SGX Nifty, to anticipate opening trends for shares in India will be changing from Monday.
The SGX Nifty will now be rebranded as the GIFT Nifty as it shifts to the NSE International Exchange (NSE IX) in the Gift City and all derivative contracts which are valued at around $7.5 billion, which traded in Singapore, will relocate to India.
GIFT Nifty will adopt a revised scheduled of two sessions from July 3 onwards. The first session will begin at 6.30 am India time and go on till 3.40 pm, while the second session will begin at 5 pm and conclude at 2.45 am.
Trading in contracts for GIFT Nifty 50, GIFT Nifty Bank, GIFT Nifty Financial Services, and GIFT Nifty IT will be open from July 3.
It is a significant step moving from the Singapore Exchange to the NSE IX for the government’s aim to turn GIFT City into a hub for Indian and global financial and IT businesses.
The benchmark Sensex closed at a new high of 64,718.56 on June 30, while the Nifty closed at 19,189.05. Both Sensex and Nifty have gained 13 per cent each since March 28, while they are up six per cent each for the year.
In 2022, SGX Nifty futures had a daily average turnover of $3.9 billion and an average open interest of $ 9.6 billion. The turnover that was generated in the offshore market will now be onshore in the GIFT City.
NSE International Exchange MD V Balasubramaniam was quoted by CNBC-TV18 as saying that GIFT Nifty is expected to have daily volunes of $1.5 billion to $2 billion.
Nifty derivative contracts were reportedly second-highest contributors to the SGX’s equity derivative volumes after SGX FTSE China A50 Index futures in FY22. These contracts played a significant role in boosting NSE’s revenues through higher than average fees and increased trading volumes.
It may be noted that in the past, the Singapore Exchange had an agreement with the NSE that let it trade in Nifty futures and options in Singapore. In 2018, however, the NSE decided to end this agreement resulting in the Singapore Exchange introducing derivative products the NSE felt violated its intellectual property rights. The matter also went to the court, however, both parties agreed to work together in September 2020.
