Mumbai, Nov 12 (UNI) United States Futures Exchange (USFE) today announced that it has signed an exclusive agreement with the Bombay Stock Exchange (BSE) for US Dollar-denominated Futures Contract, which will allow eligible US investors to directly participate in India's equity markets for the first time.
Under the agreement, USFE will license BSE's benchmark Sensitive Index (Sensex) to carry out USD-denominated futures trading, which will commence from February 22 next year.
USFE's Sensex contract will allow eligible US investors to directly participate in India's equity markets for the first time, without requiring American Depository Receipt (ADR) authorisation.
The Sensex index is composed of 30 major Indian stocks and regarded as the country's premier stock market index. The Sensex's value has risen more than 600 per cent since its low in May 2003, reflecting a significant growth of the Indian economy. BSE currently offers rupee-denominated Sensex futures to qualified Indian market participants.
''Exposure to emerging markets, particularly India, is now essential for institutional portfolio management and retail investors alike,'' said Kevin Davis, chairman of USFE.
''This agreement will provide the opportunity for US investors to gain exposure to India's unprecedented economic growth, expansion and investment performance. We are excited about this opportunity and pleased that the BSE has chosen to expand the distribution and availability of its Sensex index exclusively with USFE,'' he said.
''Sensex has been and continues to be the flagship index of the Indian capital market. Indeed, for millions of investors in India and overseas, it is synonymous with the Indian equity market and is viewed globally as a barometer of the performance of the economy,'' Rajnikant Patel, managing director and CEO of BSE told reporters.
''The launch of a futures contract based on the Sensex will facilitate overseas investors in taking exposure to the Indian equities. I am confident that the listing of the dollar-denominated Sensex contract on USFE will elicit a very positive response from the international investing community,'' he added.
USFE's USD-denominated Sensex futures contract will trade 23 hours per day and settle monthly to the corresponding value of BSE's futures contract. The contract will have a notional value of 40,000 and a tick size of USD 5. Expected market participants include hedge funds and institutions, international mutual funds, and individuals seeking investments in Indian markets.
''The Sensex futures product is an ideal fit for USFE's global distribution model and commitment to innovation,'' said Satish Nandapurkar, CEO of USFE.
''USFE's listing of the Sensex index will provide the US market participants with direct access to pure Indian equities exposure through existing futures accounts.'' UNI