The Bombay Stock Exchange and a consortium of financial institutions have launched India’s newest market in an attempt to break into the country’s fledging currency futures trading business.
The United Stock Exchange of India began operations last Monday (20 September) in the four currency pairs allowed by the Securities and Exchange Board of India – US dollar-rupee, euro-rupee, yen-rupee and pound-rupee.
After the National Stock Exchange and MCX Stock Exchange, USE is the third bourse to offer currency trading in the country.
In a release, the USE said it traded nearly $10 billion of currency derivatives on its first day of operation, giving it a 52% market share. On Friday it said average daily volume for the week was 6.31 million contracts valued at $6.31 billion, representing a 41% market share.
The BSE is the biggest shareholder in the USE with 15% ownership. The other 20 shareholders include the state minerals and metals trader, MMTC, the country’s biggest bank, the State Bank of India, its largest private bank, ICICI Bank, and securities firm Jaypee Capital.
With around 80% of the currency derivative trade still over-the-counter in India, exchange traded currency derivatives are regarded as a growth area for the country’s capital markets.