In a major change in the Indian stock market, SGX Nifty will be known as GIFT Nifty from Monday, July 3. Henceforth the base of Nifty will shift from Singapore Stock Exchange to NSE in Gandhinagar, due to which SGX Nifty will be rebranded as GIFT Nifty. This can be considered as a big change in the global business arena in India. Trading of derivatives contracts worth $7.5 billion on SGX Nifty in Singapore will now be done from GIFT City near Gandhinagar.
GIFT City has emerged as the new financial hub in Gujarat and the government is planning to develop it as a global hub rivaling Dubai, Mauritius and Singapore in the coming days. This will end the five-year-long dispute with India’s National Stock Exchange (NSE) and Gujarat-based GIFT City will develop rapidly.
How will India benefit from converting SGX Nifty to GIFT Nifty?
GIFT Nifty comprises of four products in total. These include GIFT Nifty 50, GIFT Nifty Bank, GIFT Nifty Financial Services and GIFT Nifty IT derivative contracts. V Balasubramaniam, MD and CEO of NSE International Exchange, has described it as a historic event in the history of India. For the first time, India will get international contracts which till now were exported abroad.
Nifty derivative contracts were the cash cow for SGX and generated huge profits. Both the average fee and volume of Nifty derivatives were higher. The income of the Indian stock market is also likely to increase in the current financial year. GIFT City has emerged as the first International Financial Center of India. RBI removed FEMA restrictions from this sector in 2015.
50-50 partnership between SGX and NIFTY
All open positions in SGX Nifty have been transferred to SGX Nifty as a liquidity switch. According to the deal in this regard, SGX and Nifty will share their expenses and revenue in 50-50 percent. Futures and options trading will be done at GIFT City and clearing will be done by SGX. Currently SGX Nifty works for 16 hours from 6.30 am to 10.30 pm while GIFT Nifty will work for 21 hours. That is, the work of GIFT Nifty will continue from 4 am to 2 am the next day. Trading in US Dollar denominated Nifty derivative contracts will be done exclusively on NSE IFSC from Monday.