InvestorQ : Is the SGX Nifty the same as the Nifty index? Why is it called the SGX Nifty?
Nisha Chandani made post

Is the SGX Nifty the same as the Nifty index? Why is it called the SGX Nifty?

Answer
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Ria Jain answered.
1 year ago


SGX Nifty is based on the Nifty but it is traded in Singapore Stock Exchange (SGX). That is why it is called the SGX Nifty. This was as per the arrangement between the NSE and the SGX when it was first introduced more than 15 years back. Under this agreement, foreign investors can trade the Nifty in Singapore on a real time basis. So if you are a foreign investor sitting in Singapore then you need not trade Nifty in India but can trade it in Singapore itself.

Why do some investors prefer the SGX Nifty when they can directly trade the Nifty in India? For large institutional investors there are quite a few reasons to opt for the SGX Nifty. Firstly, the SGX Nifty is denominated in dollars unlike the NSE Nifty which is rupees. Hence when you trade in SGX Nifty, you don’t worry about currency risk. Secondly, there is no securities transaction tax (STT) payable on SGX Nifty and that makes trading SGX Nifty cheaper for these institutions. Thirdly, for investors who do not have a very large exposure to India, it does not add value going through all the compliance requirements of trading in India. In such cases, they have found SGX Nifty to be better.