Gujarat International Finance Tec-City (GIFT City) in India is set to become a buzzing financial hub as derivative contracts worth around $7.5 billion are poised to move from Singapore to India. This transfer is made possible due to the successful operationalization of a cross-border trading link between the two countries’ top stock exchanges.
Starting Monday, SGX Nifty, which consists of Singapore Exchange Ltd.-traded futures on the National Stock Exchange (NSE) Nifty 50 Index, will be rebranded as GIFT Nifty. Trading for GIFT Nifty commenced at 6:30 a.m. local time, resulting in all outstanding orders being transferred to GIFT City, situated in the western Indian state of Gujarat.
This cross-border trading link showcases the growing collaboration between India and Singapore, aiming to bolster the development of financial markets and deepen economic ties. By shifting derivative contracts worth approximately $7.5 billion, India hopes to solidify its position as a leading destination for trading activities and financial services.
GIFT City is rapidly emerging as an international financial services zone, designed to provide a world-class infrastructure and a conducive environment for finance-oriented businesses. The city is equipped with modern amenities, along with tax incentives and relaxed regulatory norms, making it a popular destination for investors.
The move of derivative contracts from Singapore to GIFT City is expected to bring numerous benefits to both countries. Singapore can take advantage of India’s robust financial markets, contributing to its position as a global financial center. India, on the other hand, will witness increased trading volumes and liquidity, which in turn can enhance market efficiency.
Both countries have been working diligently to facilitate this trading link. The Monetary Authority of Singapore and the Securities and Exchange Board of India have cooperatively established the necessary regulatory framework, supervision, and oversight of this cross-border trading link.
Market participants anticipate significant trading interest in the GIFT Nifty contracts, given the substantial notional value of $7.5 billion. This development serves as a crucial milestone in strengthening the financial cooperation between India and Singapore, paving the way for further collaborations in the future.
As GIFT City expands its footprint as an international financial services hub, it aims to attract more market participants and investments from around the globe. The success of this cross-border trading link further bolsters GIFT City’s credibility and presents a promising and prosperous future for the financial landscape in both India and Singapore.