Investor Interest   Exclusive
Is SGX Nifty trading relevant for India?

SGX Nifty Futures volumes have been falling even before the NSE extended its trading hours. So the latest move by the Singapore exchange to extend its trading session may not impact NSE Nifty volumes at all.

Following the National Stock Exchange's (NSE) extension of trading hours, the Singapore Stock Exchange (SGX) has also extended the trade timings of its Nifty futures segment, the SGX CNX Nifty. Nifty futures on the SGX will be traded for 16 hours on that exchange while the Nifty now trades for six-and-half hours on the NSE. While concerns are being raised as to whether this move would snatch away the volumes of the NSE, it is not a cause for worry because there is essentially no correlation between the NSE Nifty and SGX Nifty. The dynamics of the two markets are completely different.

There are a couple of reasons for this. One, the market timings are such that NSE Nifty trading remains closed while the SGX Nifty futures are traded. As such, although the SGX Nifty opens before the NSE Nifty starts trading, it does not get the benefit of higher volumes. This is because any movement in the SGX Nifty is based on the market direction of the Nifty, which itself is a function of the news doing the rounds on that particular day. If the NSE Nifty is not trading, what would be the basis of price movement in the SGX Nifty? Only in the case of a major global event would foreign investors stand to benefit from the difference in trade timings. As attentive traders know, the SGX Nifty virtually does not trade before the Indian market opens.

Second, the volatility in the SGX Nifty volumes is quite high compared to that of the NSE Nifty, and it depends on factors that have nothing to do with the Indian market. Such volatility is not the mainstay of the NSE Nifty or the Indian stock markets, for that matter. On 4th January 2010, the total number of SGX Nifty contracts traded was 9,712, which increased more than tenfold on 5th January 2010 to 50,546. On the other hand, the total number of traded contracts in NSE Nifty Futures on 4th January was 237,231, which increased to 339,132 on 5th January, a much smaller change of 43%. Moreover, such volatility is noticed in the NSE Nifty only in case of any major domestic or international event.

The major reason cited by the NSE for extending trading hours was that the SGX Nifty was eating away at its volumes, and that this move would help it win back some of the volumes. However, it seems that the strategy has not proven effective for NSE, if the volumes are anything to go by. When the NSE opened early from 4 January 2010, the NSE Nifty futures volumes fell sharply instead of going up.

The Singapore Nifty was a sleepy futures product right until 2007. In October 2007, the daily average number of traded contracts was 22,645, but it increased by a whopping 1,102% to 2,72,291 contracts in November 2007, following the ban on participatory notes by the Indian government. However, the volumes shrank dramatically from October 2008 and have not gained momentum since then. The SGX Nifty futures average traded volumes in CY2009 fell by 46% compared to CY2008. Compared to this, the Nifty futures traded contracts have fallen by only 16% in CY2009. During this period, the Nifty has risen by 80% but this has not made any difference to the SGX Nifty volumes.

Clearly, this adverse movement in the SGX Nifty volumes in the last two years has no correlation with the NSE Nifty. The SGX Nifty appears to be influenced by a completely different set of dynamics.

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    10 years ago

    i want trading in sgx nifty

    Nifty Future Tips

    1 decade ago

    thanks for your comments.

    Investor Interest   Exclusive
    Moneylife study identifies five cheapest sectors

    A new Moneylife study has identified consumer durables as the cheapest among 49 sectors

    A new Moneylife study of 49 sectors covering 1,252 stocks has identified consumer durables, cement, paper & paper products, plastics and packaging as the top five sectors that are attractively valued, based on four key valuation parameters.

    Investors are perennially looking for low-value stocks and often go by such conventional uni-dimensional formulae such as Price to Earnings ratio. The Moneylife study combines four key parameters: Price/sales; price/operating profit; earnings yield and Return on Equity (RoE). While the valuation of the first two (price/sales; price/operating profit) parameters is based on the sales and profits of the past three quarters; RoE and earnings yield have been calculated on a yearly basis. Earnings yield is the reverse of P/E and measures the earning capability of a company (in this context, a sector) per rupee of investment.

    Among the top five sectors, the consumer durables sector scored with the highest RoE (37%). Its valuation is also considerably low with price to sales being 0.64 and price to operating profit being 5.27 times. Another high RoE yielding sector is cement (23%) with its market cap at 1.44 and 4.48 times its sales and operating profit respectively. Out of the five sectors selected, paper & paper products is currently trading at the lowest valuation. Its market cap is 0.58 times and 3 times its sales and operating profit respectively. Paper stocks also enjoy the highest earnings yield of 11%. However, its RoE is at the lowest level (11%), a reason why the sector is going cheap.

    Which was the most expensive sector going? It is the electronic media, a sector that earned just 4% of RoE and is valued at an astronomical level of 5 times revenues and 25 times operating profit.

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    YRF joins hands with SOTC, Brandinvest to promote film tourism

    Bollywood production house Yash Raj Films, travel operator SOTC and Brandinvest will promote Swiss destinations through special film tourism packages

    Innovation is the name of the game for both television and cinema marketing. Taking the trend forward, Hindi film producer Yash Raj Films (YRF) has joined hands with tour operator SOTC and Switzerland-based Brandinvest AG to promote film tourism.

    According to the agreement, the partnership offers a unique and once-in-a-lifetime entertainment experience to Indians and Indian-film fans visiting Switzerland. The package named ‘YRF Enchanted Journey’ will give travellers an opportunity to live the YRF ‘experience’ by visiting original sites and locations in Switzerland used by the production house, YRF said in a release.

    “Film studios across the globe have slowly shifted their focus to creating derivative ‘entertainment experiences’ around their actual movies, such as theme parks for instance, and we feel that this very innovative approach is a natural extension of the YRF brand of entertainment and provides a very personal experience for our audiences—something that has never been done before by an Indian entertainment brand,” said Yash Chopra.

    Apart from the site visits, travellers will also be engaged with various themes and elements seen in the studio’s most famous movies, including ‘Dilwale Dulhania Le Jayenge’, ‘Mohabbatein’, ‘Veer Zaara’, ‘Chandni’, ‘Darr’ and ‘Bachna Ae Haseeno’. Screening of special unedited shots of various Yashraj movies is also being included in the package to offer more on the YRF ‘experience’.

    Jorg Krebs, director for markets and representative of the \'YRF Enchanted Journey\' co-host, Switzerland Tourism, said, “The \'YRF Enchanted Journey\' tour spans the famous regions of Saanenland, Berne, Lucerne, Mount Titlis and Ticino and fits perfectly with our corporate strategy. This first collaboration between a film studio, a tour operator and a country with a national brand, will bring fruitful results for all involved as well as new emotions and experiences for our guests."

    The ‘YRF Enchanted Journey’ offers tour packages ranging from seven days to 19 days. While the seven-day package would cost Rs66,990 plus €1,000, the 19-day package is priced at Rs91,990 plus €2,400.

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    7 months ago

    Great Information !!
    Switzerland is known to be place of love & romance. I am loving this place after reading below article as it describes the place so beautifully.

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