The Singapore Exchange is preparing to launch a U.S.-dollar based futures contract on India's CNX Nifty 50 stock index, which market participants believe could be a used as a tool for hedging OTC equity positions. "If we can get liquidity this will be useful," said an equity derivatives trader in Hong Kong.
Market officials noted overseas funds as well as investment houses may trade the contracts. The official noted larger-scale trading could be more efficient as there are onshore limits that require full collateral after going long USD50 million worth of National Stock Exchange of India-listed contracts, which decreases leveraging ability. Officials close to the exchange said the contracts will be launched in early October. SGX also has index products linked to Japan, Taiwan and Hong Kong.
