Here’s how Singapore Exchange Limited may be affected after Nifty futures exit

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Updated: February 12, 2018 10:43:17 AM

Spooked by huge fall in Sensex, Nifty, India made an unexpected move to stop licensing products and data to foreign exchanges including Singapore Exchange Limited on Friday. As a result of the announcement, Singapore Exchange Limited (SGX) plunged 8 percent in the early trade on Monday.

Samvat, Samvat 2073, demonetisation, Sensex, Nifty India made a move to stop licensing products and data to foreign exchanges including Singapore Exchange Limited on Friday.

Spooked by huge fall in Sensex, Nifty, India made an unexpected move to stop licensing products and data to foreign exchanges including Singapore Exchange Limited on Friday. As a result of the announcement, Singapore Exchange Limited (SGX) plunged 8 percent in the early trade on Monday. Singapore Exchange is the flagship Indian equity derivatives product outside India that accounts for nearly 12 percent of its total trading volume in derivatives. Analysts and market experts are of the view that this move by the domestic exchanges can adversely affect the chances of SGX’s Nifty 50 index futures going ahead, Reuters reported. The shares on the Singapore Exchange fell 8 percent in early trade on Monday and this is the biggest percentage drop in the more than 9 years.

Ratings firm still maintains buy

Reuters quotes Global ratings firm Jefferies saying that this move by the three major Indian exchanges namely National Stock Exchange (NSE), Bombay Stock Exchange (BSE) and Metropolitan Stock Exchange (MSEI) can negatively impact that earnings of the Singapore Exchange Limited in as near-term financials may remain muted as a result of this. However, the ratings firm still maintains a buy on the exchange till the time more information on such products is out, reports Reuters citing Jefferies. Despite the Indian exchanges stopping licensing products and data to foreign exchanges,Singapore Exchange Limited said on Sunday that it would still work with the National Stock Exchange and develop and launch new India-access risk products. The Nifty fifty index futures tracks the National Stock Exchange’s main index and is used by global market participants to gain offshore exposure and track Indian equity markets.

India’s three major stock market exchanges on Friday after consulting the SEBI and Finance Ministry came out with a decision to stop the data sharing licenses given to foreign exchanges.The SIngapore Exchange Limited trades various Indian futures contracts on its platform and attracts huge trading from foreign investors. Among the contracts, the most traded is the SGX Nifty 50 index futures offered by the Singapore Exchange under a licensing agreement with the National Stock Exchange, India’s largest trading exchange.

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