GIFT Nifty is here and as the Indian equity benchmarks hit new highs, the tradition of using the Singapore Stock Exchange Nifty, or SGX Nifty, to anticipate opening trends for shares in India is set to change starting July 3.
The SGX Nifty will be rebranded the GIFT Nifty as it shifts to the NSE International Exchange (NSE IX) in the GIFT City and all derivative contracts, valued at about $7.5 billion, that traded in Singapore will relocate to India.
From July 3, GIFT Nifty will adopt a revised schedule of two sessions. The first session will start at 6.30 am India time and go on till 3.40 pm. 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.
Moving from the Singapore Exchange to the NSE IX marks another step towards the government’s ambition 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. Since March 28, the Sensex and the Nifty have gained 13 percent each, while for the year, they are up 6 percent each.
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Trading volumes
SGX Nifty futures had a daily average turnover of $3.9 billion and an average open interest of $9.6 billion in 2022. The turnover that was generated in the offshore market will now be onshore in GIFT City.
GIFT Nifty is expected to have daily volumes of $1.5 billion to $2 billion, NSE International Exchange MD V Balasubramaniam told CNBC-TV18.
In FY22, Nifty derivative contracts were reportedly the second-highest contributors to the SGX's equity derivative volumes, after SGX FTSE China A50 Index futures. These contracts played a significant role in boosting NSE's revenue through higher average fees and increased trading volumes.
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The past
In the past, the Singapore Exchange had an agreement with the NSE that let it trade in Nifty futures and options in Singapore. However, in 2018, the NSE ended the agreement. As a result, the Singapore Exchange introduced derivative products that the NSE believed violated its intellectual property rights. The disagreement went to court, but eventually, both parties agreed to work together in September 2020.
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