Tuesday, March 16, 2010

Listing of NSE S&P Index Option on SGX

The Exchange & SEBI is gung-ho about its turnover being migrated to SGX NIFTY, It also understand that SGX nifty is the driver for opening prices on India Stock Exchange. In order to avoid price discovery being migrated overseas, SEBI mulled opening Equity markets one hour earlier.

But on other hand NSE entered into alliance with singapore stock exchange to list other india dominated index Futures & Options on SGX.

The paper said that it may list S&P Index in India, but it failed to report of NSE option listing on SGX, Also NSE press release used proper words to hide this development.

NSE knows very well that once the Nifty options are listed on SGX, FII positions on Nifty options will move to singapore, only big money will be able to earn from spreads between Nifty options & SGX nifty options. maybe foriegn money will help in better price discovery and maybe FII will have better say in market.

The volumes on Indian equities may shink & Once again NSE will increase the timing at 9 to 5.

Is this a strategy of NSE to diversify / derisk its volumes, as there is growing competition among exchanges in India specially when MCX is launching its own exchange.

No matter if the volumes gets diverted, NSE will earn fees from licensing, but what we will lose is volume &
government will lose STT. but FII would be invested in India dominated products only.

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