Despite GAAR delay, SGX Nifty futures trade steady

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Devangi Gandhi: Mumbai, Jan 05 2013, 00:25 IST

With the end of 2012, the dust seems to have settled on the issue of a likely shift in the trading activity of Nifty index futures to the Singapore Exchange (SGX) amidst delay of the general anti-avoidance rules (GAAR). After reporting a significant surge between February and May 2012, due to concerns over GAAR implications, both the open interest and the volumes on Nifty futures traded on the SGX platform, have turned steady accounting for a greater proportion of the domestic trading than a year ago.

Latest data show the open interest of Nifty futures traded on SGX accounted for about 3% of that on NSE whereas volumes in terms of number of contracts traded constituted close to 25% of the trading on the domestic exchange. At the end of December 2011, these contributions stood at 2% and 10% respectively.

Market commentators acknowledge the trading activity on SGX as healthy and say a chunk of trading shift that happened in the first half of 2012 may stay there.

“While there has been a pause in the shift of Nifty futures trade to SGX, at 3% of that on NSE, the open interest on the Singapore platform appear significant,” said Siddarth Bhamre, head of derivatives with Angel Broking.

According to Bhamre, the open interest in the SGX Nifty which averaged at about 7 lakh share in December 2012, compared with 4.8 lakh share in January, may rise in-line with the overall recovery in trading action on local bourses.

After 2012-13

... contd.

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