SGX shares fall 8 pct after Indian bourses rein in offshore trading

File photo: An SGX sign at the Singapore Stock Exchange on July 19, 2017.

SINGAPORE – Shares in Singapore Exchange Ltd (SGX) fell 8 percent following an unexpected move by India’s three main stock exchanges to stop licensing products and data to foreign exchanges to prevent trading from migrating overseas.

In early Monday (Feb 12) trade, SGX shares tumbled to the lowest since January 2017 and suffered their biggest percentage drop in more than nine years.

The exchange said on Sunday that it will develop and launch new India-access risk products.

SGX’s Nifty 50 index futures is the Singapore bourse’s flagship Indian equity derivatives product and is widely used by global market participants to gain offshore exposure and track Indian equity markets.

SGX Nifty 50 index futures tracks the National Stock Exchange’s main index.

Analysts said the move would especially affect SGX’s Nifty 50 index futures, which accounts for about 12 percent of its total derivatives trading volume.

“While near-term financial impact is muted, earnings may be negatively impacted by mid to high single digit in absence of complementary access products for the Indian market,” Jefferies analyst Krishna Guha said in a report on Monday.

Jefferies is still maintaining its buy rating on the exchange “while we wait for launch and more information on such products,” Guha added.