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 cooperation 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 says: "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 explains 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, has since moved into currency futures at the end of last year and is now looking to enter the equity sector.
Keith says: "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, says Keith. "There is increasing appetite among Indian investors to access international markets which, through this partnership, we can provide in the form of indices."
He adds that international investors want access to the opportunities in the Indian market, so these indices can also provide opportunities for the international investor community.
