September 12, 2011

 

Press Release No. 1

NSE launches joint awareness campaign on Global Indices

 

The National Stock Exchange (NSE) today launched a nationwide awareness campaign on its futures linked to the global indices S&P 500 and Dow Jones Industrial Average and options linked to S&P 500, which were listed on the exchange recently. The exchange is doing a joint campaign with senior officials from the Chicago Mercantile Exchange (CME), Standard and Poor’s and Dow Jones Indexes.  Starting with Mumbai today, the joint campaign will cover the cities of Ahmedabad, Delhi, Kolkata and Chennai over the week.

 

This  is  the first time in the world that futures contracts on the S&P 500 index  have been introduced and listed on an exchange outside of their home country,  USA  and  creating  awareness  about  the products is critical to generate  interest among Indian investors in the indices. Since the time of the  launch  (29th  August,  2011) derivatives on the two indices have been clocking   in   a  daily  average  of  around  4000  contracts,  with  wide participation across the country.

 

In  the joint campaign ,  CME is being represented by  Mr. Scot Warren, Head of  Equity  index products and services, CME Group, Standard and Poor’s  by Ms. Roopa Kudva, MD and CEO of Crisil and Region head, South Asia and Mr. Craig  Lazzara,  Product  head,  S&P   and Dow Jones Indexes by Mr. Jamie Farmer, Executive Director, Global Business Development  and Communications.

 

NSE will focus on the importance of the cross listing agreement, on the advantages of trading the products on NSE and the incentives announced. CME will be focusing on their experiences in the US on the way the two indices trade, the kind of participants who trade on these indices, etc. Both S&P and Dow Jones Indexes will stress the uniqueness of the indices, what makes the indices move in the US markets and S&P’s experience of trading options on the Chicago Board of Options Exchange.

 

In addition to the investor awareness campaign, NSE hopes to broaden market participation in the  global indices  (futures  on  S&P 500 and DJIA and options  on  S&P  500) through the Liquidity Enhancement Scheme (LES), i.e. incentives  announced by the exchange, which come into effect from the 15th of September, 2011.

 

Announcing the formal launch today, MD and CEO of NSE, Mr. Ravi Narain said “We have got very good feedback from the market on the incentive schemes that we have announced on derivative products of S&P 500 and DJIA. We have had a good start and we hope that volumes will pick up further, as the liquidity enhancement scheme kicks in and the advantages of the products are understood better’’.

 

In  June  2011, SEBI had permitted exchanges to introduce LES in specific securities,  subject  to  fulfillment of  the stipulated conditions for a maximum  period  of  six  months. The introduction of LES by NSE is in line with the circular issued by SEBI.

 

Internationally, exchanges introduce such schemes in order to enhance liquidity, particularly in newly launched products.  Trading interest is observed to be enhanced by Liquidity Enhancement Scheme (LES) in products having inherent potential.  When there are multiple competing products, LES acts  as  an  important  incentive  to  attract  the  attention  of  market participants and thus generate liquidity in the long run.

 

The scheme is open to all market participants, i.e. it shall include the members and their clients as well.   The scheme provides a three tier incentive structure, i.e. order level, trade level and open interest level.

 

With regard to the  order  level  incentive,  all  market  participants fulfilling  the  stipulated  obligations  and criteria shall be eligible to receive  incentives  on a proportionate basis from a pool allocated in this regard.

 

In respect of trade level incentives, a buy trade shall entail an incentive of Rs.400 per crore and a sell trade Rs.1700 per crore.  The incentive will be given on the basis of the contract value of the futures contract and in the case of options, on the basis of premium paid for the contracts.

 

In respect of Open interest level incentives, top five participants in terms of the total open interest shall be provided incentives from a specifically allocated pool for this purpose.

 

All these incentives are subject to applicable limits and conditions as detailed in the circular, issued on 29th August, 2011.

 

Also, NSE shall not be levying any transaction charges on the trades done in these contracts from the date of commencement till February 29, 2012. The above referred incentives through LES are over and above this waiver of transaction charges.

 

Speaking on the cross listing agreement with NSE which enabled introduction of this product and their India strategy, Mr. Scot Warren, Managing Director, Equity Index Products & Services, CME Group said, "We congratulate the NSE on today’s formal launch of the S&P 500 and Dow Jones Industrial Average index futures contracts & Options linked S & P 500. We continue to expand our business globally through our international partnerships, and this marks another milestone in our agreement with the NSE following the launch of the E-mini and E-micro futures contracts based on the S&P CNX Nifty (Nifty 50) Index earlier this year."

 

Ms. Roopa Kudva said: “S&P Indices, for the first time in its history, has licensed an entity outside the U.S. to list S&P 500 futures & options contracts.  S&P Indices is proud of its longstanding partnership with the CME Group of 29 years for index futures and of its 28-year partnership with the Chicago Board of Options Exchange (CBOE).  We are looking forward to the same longevity with the National Stock Exchange of India and to having the honour of providing Indian investors with exposure to the US equity markets in Indian rupees.”

 

Mr. Jamie Farmer said: “The listing of Dow Jones Industrial Average futures on the NSE is clearly a landmark event for the Indian market. As one of the world’s most widely recognised financial brands, the DJIA has proven to be a reliable barometer of American business and finance for 115 years. Now, with this listing, Indian investors have access to the U.S. markets as never before.”

 

NSE has been conducting awareness road shows on the global indices for the past few months.  Seminars have been held with member brokers and market participants in different parts of the country.

 

NSE has put in place an exclusive web page in its web site, providing information on these indices http://www.nseindia.com/products/content/gi/product_gi.htm . With the introduction of these products and LES, Indian investors are going to have the advantage of an international asset class, coupled with an incentive scheme.

 

 

Press Release No. 2

News about Pipavav Shipyard Limited

 

The media had reports that Pipavav Shipyard Limited may receive a large order from Mazgaon Dock in Mumbai.

 

The Exchange, in order to verify the accuracy or otherwise of the information reported in the media and to inform the market place so that the interest of the investors is safeguarded, had written to the company.

 

Pipavav Shipyard Limited has vide its letter inter-alia stated, "Mazagon Dock Limited (MDL) had sent to the Company in March 2011, a copy of their Expression of Interest entitled "Synergising Efforts of MDL in Shipbuilding" inviting private sector shipyards to submit proposals for a joint collaborative strategy to meet the challenging timelines in order to liquidate the order book of MDL. The Company had responded to the same, and in response, the Company has received a Letter of Intent from Mazagon Dock Limited, advising us that the meeting of Board of Directors of MDL held on September 09, 2011 has approved the Company as the Joint Venture Partner, and that the JV (Joint Venture) would be named as the Mazagon Dock Pipavav Limited (MDPL). The Board of Directors of the Company at its meeting held today i.e September 12, 2011 has unanimously approved the setting up of the JV with MDL."

 

 

Press Release No. 3

News about GTL Limited

 

The media had reports that lenders had approved a debt restructuring proposal for GTL Limited.

 

The Exchange, in order to verify the accuracy or otherwise of the information reported in the media and to inform the market place so that the interest of the investors is safeguarded, had written to the company.

 

GTL Limited has vide its letter inter-alia stated,” Whenever the company reaches an agreement with lenders and/or potential investors the company would disseminate the same to the stock exchanges. In the mean time kindly note that the reports in the sections of media related thereto are mere speculation."

 

 

Press Release No. 4

Clarification by GTL Infrastructure Limited

 

Substantial increase in trading volumes have been observed in GTL Infrastructure Limited.

 

The Exchange, in order to ensure that investors have latest relevant information about the company and to inform the market place so that the interest of the investors is safeguarded, had written to the company.

 

GTL Infrastructure Limited has vide its letter inter-alia stated,” The Company believes in adhering to the best corporate governance practices and accordingly we have disseminated all important matters to the exchange in the past. Accordingly in future also on development of any important issue, the Company will disseminate the information on the same to the exchanges. As such the Company is not aware of any reason for increase in volume of the shares."

 

 

Press Release No. 5

Market-wide Position Limit in KSOILS

 

The derivative contracts in the underlying KSOILS have crossed 95% of the market-wide position limit on September 12, 2011. It is hereby informed that all clients/ members shall trade in derivative contracts of  KSOILS by offsetting their existing positions till the open interest comes down to 80% of the market wide position limit.

 

 

Press Release No. 6

NSE completes its 2885th Normal Settlement

 

The Exchange has successfully completed its 2885th Normal Settlement (Rolling T+2 following SEBI directive) since inception i.e., Settlement Number N – 2011171 on Sep 12, 2011. The settlement statistics are as follows:    

 

Particulars
Value

 

N-2011171

Total traded quantity (lakhs)

6507.98

Total traded value (Rs. In Crores)

11358.26

Total value of the settlement (Securities) (Rs. In Crores)

2806.31

Total value of the settlement (Funds) (Rs. In Crores)

1051.13

Shortages for the settlement

0.14%

% of  Delivery ( No. of shares deliverable / No. of shares traded )

24.81%


Retail Debt Market has completed its 2158th settlements, details of which are as follows:

 

Settlement No.

Traded Value

Settlement Value

 

 

Securities

Funds

D- 2011171

1058.30

NIL

NIL