- DGCX SENSEX Futures is the first Indian equity index futures contract to be listed in the MENA region
- Product marks DGCX’s entry into the equity asset class
- New contract will go live on July 5, 2013
Further expanding its portfolio of derivatives products, the Dubai Gold and Commodities Exchange (DGCX) today announced the launch of SENSEX Futures, the first ever Indian equity index futures contract to be listed on an exchange in the Middle East and North Africa (MENA) region. The new contract, which will go live on July 5, 2013, will be cleared by the Dubai Commodities Clearing Corporation (DCCC).
DGCX SENSEX Futures is a futures contract based on the S&P BSE SENSEX, the blue-chip stock index of India’s leading bourse, the Bombay Stock Exchange (BSE). Recently co-branded in partnership with S&P Dow Jones Indices, the SENSEX is considered the most popular gauge of the Indian equity market and has high brand recall among investors. The SENSEX Index tracks the performance of 30 of the largest and most heavily traded stocks on the BSE.
Gary Anderson, CEO of DGCX said : “The contract is part of a planned expansion of our Emerging Market product offering, and will offer an exciting trading option for investors seeking exposure to one of the world’s largest Emerging Markets. While the retail segment is a key target market, we are also anticipating strong interest from a wide range of regional and international investors including UNHWIs, professional traders and institutional investors. DGCX participants have already shown great interest in trading SENSEX futures.”
DGCX’s new equity futures contract will target retail participants including non-resident Indians (NRIs) across the world, existing DGCX members focused on retail offerings, the NRI desks of banks, professional traders trading and arbitraging Indian markets offshore and large foreign institutional investors seeking exposure to Indian equity markets.
“With DGCX SENSEX Futures, we hope to build on the success of our India-focused contracts, which continue to generate record trading volumes. The listing of SENSEX Futures marks the introduction of equities as an asset class on the Exchange. We have plans to launch more such contracts to expand our equity product suite,” Anderson concluded.
DGCX has established robust market-making mechanisms for the contract and will have price makers and price takers from the first day of trading, ensuring strong liquidity on both sides. Trading SENSEX Futures on DGCX will enable market participants to gain economic exposure to the SENSEX index whilst benefiting from extended trading hours, low transaction costs, attractive margins and tax free securities and derivatives transactions. Non Resident Indians (NRIs) in the GCC and worldwide do not need to transfer funds across markets in order to trade the product.
Ashishkumar Chauhan, MD, BSE said; “BSE tied up with DGCX for SENSEX derivatives in October 17 2011. Derivatives on Indian stock indices are very popular in several overseas markets including Singapore. Trading in Indian indices has grown substantially over the last decade in overseas markets. This launch is a key milestone for us since it is the first time we have partnered with an exchange in the MENA region to launch an equity-based derivatives product. DGCX SENSEX Futures will provide investors with an important tool for managing their portfolios benchmarked to BSE’s equity indices.”
“Given that a large number of NRIs reside in the Middle East region, we are confident about the SENSEX futures contract’s potential to generate high interest and trade volumes in line with interest in other jurisdictions,” Chauhan added.
DGCX SENSEX Futures can be traded from 7:00am to 11:30pm (GMT +4), Monday through Friday. The last trading day is the last Thursday of the contract month. The new contract will be denominated in US dollars and settled in cash. DGCX SENSEX Futures will use the same settlement methodology and calculations as the underlying index (S&P BSE SENSEX), which means the contract settlement price is the same as BSE’s published price at the same time. The contract size is US$ 1 x Index while the minimum tick size is 1 Index point valued at US$ 1
DGCX’s product suite already covers a diverse range of sectors including precious metals, base metals, currencies and energy. This includes the world’s first Indian Rupee futures contract and the Middle East’s first Copper futures contract. Since its launch in 2005, the exchange has traded over 27.5 million contracts valued at over US $ 1.12 trillion. The exchange has a total of 267 members.
