NSE to become Market Leader in Marketcap

Riding on superior technology and FII preference, the National Stock Exchange is expected to surpass its older counterpart, the Bombay Stock Exchange, in market capitalization this year for the first time in history.
According to a report by global consultancy Celent, 2009 would be the first year when NSE's market capitalisation is expected to exceed that of BSE.
"NSE is expected to overtake BSE in market capitalization in 2009. Already far ahead in turnover, NSE is expected to further its lead over its older counterpart," the report titled, 'Indian Exchange-Traded Securities: Poised for Further Growth' stated.
NSE's market capitalization stood at Rs 47,01,923 crore at the end of trade on Friday last week, not far behind the Bombay Stock Exchange's valuation of Rs 50,12,966.76 crore, according to data available on the two bourses.
In terms of the relative size of the two main Indian equity markets, NSE has become the exchange of choice, it added.
According to Celent estimates, the market turnover of NSE for 2009 would be more than two times the turnover of BSE. On August 7, NSE turnover in value terms was around Rs 17,650 crore as against BSE's about Rs 5,443 crore.

Interest rate futures

Sebi set for interest rate futures in Q4
Hedging Tool For Banks To Beat Fluctuations

After successfully commencing currency futures, Sebi now plans to implement interest rate futures in the
fourth quarter of this fiscal. Speaking on the sidelines of a programme organised by Merchants Chamber of
Commerce on Tuesday, Sebi chairman C B Bhave said an RBI-Sebi joint committee is working out the modalities for this and would submit its recommendations soon.
Bhave said it would take lesser time to implement interest rate futures compared to currency futures. “We started working on currency futures in March and finally implemented it on NSE in August-end. But, we have gained experience through this and so interest rate futures will not take that much time,’’ he said. Interest rate futures help banks and FIs to hedge during interest rate fluctuations.
The Sebi chief said the regulator would examine the possibility of introducing more currencies like euro in the futures platform. “Now, it is only rupee and dollar in currency futures. Later, we could see more hard currencies.
NRIs and FIIs too can be allowed on this platform,’’ he added.
Stressing the need for more co-operation between regulators, Bhave said products like interest rate futures
involves two regulators—RBI and Sebi. “In future too, there should be more co-operation for new products.
Otherwise, new product launches will be delayed,’’ he said. Bhave said Sebi would introduce a pilot project for small investors called Applications Supported by Blocked Amount (ASBA) on September 8.
The project would be kicked off with the IPO of 20 Microns. Sebi has roped in five banks for this purpose—ICICI Bank, HDFC Bank, Corporation Bank, Union Bank and SBI.
Under the scheme, small investors don’t have to pay anything along with IPO applications. The bank where an investor has an account will block the amount for the time being. Only if the share is allotted, would the money be transferred from the account.
Commenting on self-regulatory organisations (SROs), Bhave said intermediary organisations are not keen to
become SROs. “We need a change of mindset,’’ he added.

Currency trading at NSE

NOT A FALSE
START
Currency derivatives trading got off to a curious start on Friday. Even as finance minister P Chidambaram rang the bell, the thread snapped! Finally, the FM had to ring the bell with his hands — not the kind of auspicious start you would have imagined. But in the actual ring, things were much better. Volumes were decent, backed by trade orders from banks and some brokerages.

India Started Currency trading

MUMBAI: India kicked off its first exchange-traded rupee futures on
Friday with heavy trading reported in the first minutes of business and
front-month contracts seeing the highest activity. Dealers said banks
and large companies made the bulk of trading, even though the
contract size is small compared with exchange-traded currency futures
elsewhere.
By 10:14 a.m. (0444 GMT), more than 8,000 contracts were traded on
the National Stock Exchange (NSE), the first of several platforms
planned, with the heaviest trade on the September and October
contracts, NSE data showed. On the spot market, the rupee was
trading at 43.74/75 per dollar, slightly firmer than Thursday close at
43.78/79.
India is trying to develop more sophisticated financial markets and
hedging tools to support its rapidly growing economy and Finance
Minister Palaniappan Chidambaram said at the start of trading the
government needed to push on with more instruments.
"After having launched currency futures, we need to revitalise
exchange-traded interest rate derivatives markets, offer
exchange-traded credit derivatives and also need to strengthen the
corporate bond markets," he said. "These three products are high on
the priority list of the government and I ask the government to move
forward on this."
Each contract size is $1,000, smaller than 12.5 million Japanese yen
($115,000) or 100,000 Australian dollars (US$86,000) contract sizes
on the Chicago Mercantile Exchange. The Multi Commodity Exchange
of India and the Bombay Stock Exchange have also received
in-principle approval to offer exchange-trade currency futures.