The Singapore Stock Exchange (SGX) is the first Asian exchange to open a liaison office in India. The exchange, which has appointed Neena Prasad as its chief representative, wants to facilitate the Government to raise funds for infrastructure development. BusinessLine met Magnus Bocker, CEO of SGX for an interview,. Excerpts:
At present, only five Indian companies are listed on the SGX. How many companies are expected to list in two years, now that you have liaison office in Mumbai?
Several Indian companies are ambitious about going abroad and raising money. Of course, I will be disappointed if we do not at least double the number of listed companies. But what is important when you open an office is not only getting Indian companies that want to go abroad and raise money, but it is as much about bringing investors from Singapore to the Indian market. They can do so directly, or we can facilitate them through our co-operation with the NSE.
There is a lot of talk about the ‘Modi wave’ here. What is the response of international investors?
I do not hear so often (of ‘Modi wave’) than about Abenomics in Japan. I think what I hear more about India is that there is a broader line of change, may be because the parliamentary system here is stronger than in Japan, so we don’t need one individual to make it happen here.
What I hear (now), which is quite important, is certainty. The Indian market has had, for a quite a long time, a lot of uncertainty, whether it is on tax rules, investment, products and opportunities. A lot of things have happened in a short period of time (after change in Government), which encourages investors.
You talked about providing ‘options’ trade along with futures trade for SGX Nifty. What is your view now?
When I ask my investors what they would like to see in the years to come, I find them looking for other products. If they were to rank, they would like to see Nifty option as a more attractive tool to mix with the futures and the cash market. There are a few other indices they would probably look for as well. They would also like to see how we can trade on a rupee-dollar product or a rupee bond. There is a lot of interest in the Indian market, because it is quieter abroad.
Why should Indian companies go to Singapore SE to raise money?
We are a source of capital. We reach out to investors. When we talk to companies on why Singapore, it is because they want to have one more source of capital beyond what they have today. It is a question of reducing the risks. We are here to support Indian companies to do what they already do. I do not think, they should ever think about moving from one place to another. Please remember, the NSE is not our competitor, but best partner in India.
The Indian Government plans to raise $ 1 trillion for infrastructure. How do you plan to help in this direction?
If you look into the need of $ 1 trillion, a large part will come from private companies which, in turn, will raise money through IPOs, bonds etc. We want to be a facilitator for these companies. We have a lot of keen investors who want to invest in infrastructure. They can use SGX to invest into India.
First, we need to see how better we can facilitate them in direct investment. So, companies that want to raise money for infrastructure come to us or for exchange traded funds. The second way is through hedging their currency risk through rupee-dollar futures contract on SGX.