Further expanding its equity suite and its emerging market portfolio, the Dubai Gold and Commodities Exchange (DGCX) today announced the launch of two Futures contracts based on the MSCI India Index. One contract is based on the MSCI India Price Return Index, which takes into account only the price performance of constituent stocks in local currency (Indian Rupee) while the other is based on the MSCI India Total Return Index, which takes into account both the price performance and the dividend payments and is calculated in US Dollar terms. The new contracts, which went live on October, 17, 2014, are being cleared by the Dubai Commodities Clearing Corporation (DCCC).
The MSCI India Index represents 67 locally listed entities in India and covers approximately 85% of the investable Indian equity market universe. The MSCI India Index is designed to measure the performance of large and mid-cap segments of the Indian market. DGCX MSCI India futures offer DGCX members, including global FCMs, banks, asset managers, professional traders, and foreign institutional investors the opportunity to participate in the performance of the Indian equities.
Gaurang Desai, Interim CEO, DGCX, said: “The contracts are part of a planned expansion of our Emerging Market product offering, and are specifically designed to cater to the investment requirements of regional and international participants seeking exposure to one of the world’s largest and fastest growing Emerging Markets, India. The DGCX MSCI India futures trade alongside DGCX’s flagship INR FX contract and provide international investors with the tools to replicate their macro India trading mandates.”
“We are amidst an intense regulatory shift towards CCP cleared derivative contracts that aim to minimize the systemic risk of OTC traded derivatives. The DCCC cleared DGCX MSCI India futures will provide global investors with an alternative to the highly popular MSCI India Swaps traded on the OTC market.” Desai added.
“We are extremely excited to work with the DGCX in further expanding our global derivatives licensing footprint in the fast growing MENA region,” said Ricardo Manrique, Executive Director and Global Head of Derivatives Licensing at MSCI. “This is yet another important step in the global expansion of our strategic relationships with derivatives exchanges that enables them to provide investors that are benchmarked to MSCI indexes with tools to help them manage their portfolios effectively and efficiently.
The DGCX MSCI India Index Futures contracts can be traded from 7:00am to 11:30pm (GMT + 4), Monday through Friday. The DGCX MSCI INDIA Price Return Index Futures contract is sized at USD 25 per index point and expires on the last Thursday of the contract month aligned with expiry of Indian equity derivatives. The DGCX MSCI INDIA Total Returns Index Futures contract is sized at USD 50 per index point and the last trading day is the third Friday of the expiry month coinciding with the global expiry of derivative contracts. Both the contracts will be cash settled in US Dollars.
DGCX’s product suite already covers a diverse range of sectors including metals, currencies, hydrocarbon and equities. This includes DGCX S&P BSE Sensex Futures which is the first Indian equity index futures to be listed in the region.
MSCI India Index is designed to measure the performance of the large and mid cap segments of the Indian market. With 67 constituents, the index covers approximately 85% of the Indian equity universe.