INDIA - FTSE Group has partnered with India's stock exchange MCX-SX in order to offer a broad range of domestic and international indices to the Indian market.
The index provider signed a co-operation agreement with the exchange last week, which allows FTSE to establish its presence in India, the fastest growing market after China.
FTSE Group chief executive officer Donald Keith told Global Pensions that the group wants to establish a strong position on strategically important markets such as India for the future.
He said: "There is significant growth in India over the long term, similar to China. However, it is not an easy market for foreign investors to access due to a range of reasons, including regulatory and cultural differences, so it is important to have a strong local partner."
He explained that MCX-SX was created by Financial Technologies because there was a gap in the market for an exchange which could bring in a new range of innovative products. The exchange initially started with commodities, moved into currency futures at the end of last year and is now looking to enter the equity sector.
Keith said: "We are looking to first develop new domestic equity indices and then over time there is scope to extend this to other asset classes. These indices will form the basis for ETFs and derivative-based products."
While the use of index-based products in India is in its early stages, with around $1bn in ETFs in India, the market is growing at a fast pace, said Keith. "There is increasing appetite among Indian investors to access international markets which... we can provide in the form of indices."
He added that the new indices will also be a way for international investors to access the Indian market.
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