Global exchange and capital markets operator, Deutsche Boerse (DB1), is deepening its relationship with the Bombay Stock Exchange to further develop technology and products for both, the Indian financial markets and overseas.
DB1 and its subsidiaries, Eurex as well as STOXX, are all focused on India because of the “huge upside potential of the financial and capital markets in the country,” Javier Tordable, the London-based Senior Vice President at DB1 told fii.news.com.
BSE in 2014 completed the overhaul of its trading infrastructure based on Deutsche Boerse’s T7 trading technology. Through this new trading system, BSE traders and brokers use one of the most advanced trading systems of the world. The T7 platform, which went live on November 28, 2013, has upgraded BSE’s trading system in line with the global standards and become ten time faster than any other Indian exchange as part of the technology know-how sharing alliance with Eurex.
The DB1 Zurich-based index-daughter STOXX Ltd plans to structure an Indian specific product in the coming years as a follow up response to the interest of Indian businesses in DAX, EuroStoxx50 and the Swiss Market Index.
An option being explored is the “Indian minimum variance” type of index, Shirley Low, Head of Sales, Asia Pacific and Managing Director at STOXX Ltd., said.
STOXX will soon appoint a senior executive to market its products in India and Australia.
Prime Minister Narendra Modi’s mantra for a change in attitude and mindset from “red tape to red carpet”, which he elaborated upon and explained to entrepreneurs during a visit to Japan, has given a tremendous boost to the confidence of transnational companies such as the Deutsche Boerse.
“The sentiment of the investors has turned bullish on the positive approach adopted by the Indian Prime Minister,” said Tordable who is also the Group’s Global Executive for India and handles the BSE partnership and international market development.
DB1 and BSE have jointly devised multiple market strategies. DB1 has a long-term commitment towards the Indian financial markets in general and BSE in particular, said Tordable. DB1 acquired a 5% stake in BSE in 2007.
Global financial experts expect 15% to 20% of the Indian population of 1.2 billion to trade in the local capital markets in the coming years, a substantial increase from the nominal 2% at present.
Since April 2014, the DB1 Group has been promoting BSE by disseminating its real time data price globally. “We are using our global network of sales teams to also promote our BSE partnership,” Tordable said.
“This illustrates that our cooperation goes beyond the 5% per cent stake in the 150-year old exchange,” he said, underlining his group’s approach towards the Indian market.
With the regulatory framework definitely set to liberalize further in the coming years, BSE is becoming one of the most attractive bourses, offering stocks and shares of companies operating in the world’s most promising economy.
Also, the Indian exchanges are also on the lookout to invest in international exchanges, according to Tordable.
Demand for foreign portfolio investments is expected to rise in the coming years as Indian companies expand their participation in international stock, shares, commodities and structured product markets, he believes.
“DB1 wants to assist India-based investors in understanding international and European products as there is a massive scope of generating business from India and into India,” adds Markus Georgi, Senior Vice President and Head of Representative Office in Eurex’s Hong Kong office overseeing markets in Asia and the Middle East.
Some of the programs being run include training Indian talents through tie-ups with institutions such as S.P. Jain Institute of Management and Research.
Eurex has also collaborated with international schools to educate university students in all aspects of the international capital markets and globally traded financial products. The DB1 group is very serious in its efforts to nurture those with an interest in and talent for participating in the derivatives market activities. For this purpose it is eyeing the big pool of university students that are graduating year after year.
Eurex and S.P. Jain Institute have set up a simulation trading laboratory in Mumbai. Eurex provides real time data for testing and also supports the lab financially.
The S.P. Jain Institute backs the DB1 group’s ongoing seminars and training sessions which are held regularly across major Indian cities to build a solid base or pool of efficient traders for the financial markets.
DB1-BSE Cooperation – Highlights
Deutsche Börse is supporting sales and marketing for all BSE market data products to customers outside India, while the Indian exchange continues to serve its domestic clients. Under a cooperation agreement signed in April 2014, Deutsche Börse and BSE also share joint responsibility for technology and product development and innovation, which includes expanding the reach of its existing line of products and the creation of new market data solutions and infrastructure to support BSE’s product offerings.
Products covered under the cooperation agreement include real-time, delayed and end-of-the-day closing and settlement data for BSE’s Equity and Derivatives markets, corporate data such as Results, Announcements, Shareholding Patterns and Corporate Actions as well as Real-time and Delayed Indices.
This market data agreement also further strengthens the cooperation between Deutsche Börse and BSE. In March 2013, the two exchanges formed a long-term technology partnership in which BSE will deploy Deutsche Börse Group’s trading infrastructure.
