SGX Nifty Renamed as GIFT Nifty on July 3
In a significant development in the global trading landscape, the renowned SGX Nifty will undergo a transformative rebranding as GIFT Nifty, effective from July 3rd, 2023.
This move involves relocating derivative contracts worth $7.5 billion from Singapore to India, specifically to the NSE International Exchange (NSE IX) in Gujarat's GIFT City.
With the introduction of GIFT Nifty, India aims to strengthen its global investor reach and establish an international contract previously traded outside the country.
Key Points to Note About This Change
Let us have a clear understanding of this recent change here in detail-
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Four GIFT Nifty Products
The umbrella brand will include 4 derivative contracts - GIFT Nifty 50, GIFT Nifty Bank, GIFT Nifty Financial Services, and GIFT Nifty IT derivative contracts.
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Extended Trading Hours
The trading hours for GIFT Nifty will be extended from 4 am IST to 2 am IST the following morning, allowing for trading overlap with Asia, Europe, and US trading hours.
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Indicators for Indian Markets
GIFT Nifty will replace SGX Nifty as the early indicator for the Indian market, setting the price market and tone for the Indian market.
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Expansion of Global Investor Reach
The NSE-SGX connect will enable global investors to directly engage with the Indian capital markets through the NSE IX in GIFT City, increasing their reach and participation.
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Seamless Transition for Traders and Investors
Traders and investors will continue to place orders as they have been doing, with the servers that match the orders shifted to GIFT City. The trading experience remains largely unchanged.
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Tax Neutrality and Advantages for Non-Resident Players
GIFT Nifty, the stock index in GIFT City, offers a similar tax environment to SGX Nifty, ensuring tax neutrality for international players. Additionally, non-resident players can benefit from tax advantages in GIFT City, such as exemptions from the capital gains tax, securities transaction tax (STT), and stamp duty.
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Partnership between SGX and Nifty
SGX and Nifty will have a 50-50 partnership in GIFT Nifty. SGX will handle clearing, while the trading of futures and options will take place in GIFT City.
Implications for the Indian Economy and Stock Market
The transformation of SGX Nifty into GIFT Nifty is a significant shift in global trading with implications for India's economy and stock market. It aligns with GIFT City's ambitions to compete with international financial centres like Dubai, Mauritius, and Singapore.
The CEO of NSE International Exchange described this move as a "watershed moment" for India, as it introduces an international contract previously traded outside the country.
This rebranding is expected to significantly boost GIFT City, India's first international financial centre. The transition to GIFT Nifty will attract a broader range of participants, including Indian entities and members of the Singapore Exchange, resulting in a larger and deeper liquidity pool.
Furthermore, this shift and the development of GIFT City may pave the way for future market developments and initiatives to engage global markets with the Indian capital markets. The extended trading hours will also enhance accessibility for investors across different time zones.
Conclusion
GIFT Nifty represents a significant milestone in India's financial ecosystem. It brings forth immense opportunities for investors and traders, enabling greater access to the Indian market.
As we embark on this exciting journey, we anticipate further growth, increased liquidity, and future initiatives to strengthen the bond between Indian and global markets. The stage is set for a promising future of expanded opportunities and enhanced accessibility in the Indian financial landscape.
Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.