BSE gets SEBI nod to launch Oman Crude Oil contract in commodities
Mumbai, October 23, 2018: BSE, Asia’s oldest exchange and now the world’s fastest exchange with the speed of 6 microseconds, has received markets regulator Sebi’s approval to launch Oman Crude Oil contract on its newly launched commodity derivatives segment.
BSE had marked its entry into the commodity derivatives segment with gold and silver contracts on October 1, 2018 and became India’s first universal stock exchange with all assets classes including equity, mutual funds, currency and commodity in its portfolio.
Shri Ashishkumar Chauhan, BSE MD & CEO said, “BSE believes in systematic development of market through product innovation, awareness and research with a view to provide a wider product range to the market participants.”
The BSE Oman Crude Oil Futures Contract will be settled on Dubai Mercantile Exchange Oman Crude Oil prices on the expiry day. BSE recently entered into an agreement with Dubai Mercantile Exchange (DMX) a premier energy-focused commodities exchange in the Middle East, for the growth and systematic development of commodity derivatives markets in the Crude Oil Complex.
The Oman Crude Oil is medium sour crude. As per market survey, most of the Indian oil producers and consumers are now taking spot price of Oman oil as the benchmark for trade. The average deliverable supply of Oman Crude in the past 5 years was INR 218,571 Crore. Oman Crude Oil is having high correlation with other variants of crude oil such as WTI, Brent, Dubai variant, etc. For instance, the correlation between Oman crude and WTI is ~0.99 while between Oman and Brent is ~1.0. Further, the composition of Indian crude basket represents average of Oman and Dubai (sour) and sweet crude oil prices in the ratio of 73:27 in 2017-18. The annualized volatility of Oman is 37% in the last 3 years.
BSE (formerly Bombay Stock Exchange) established in 1875, is Asia’s first & now the world’s fastest Stock Exchange with a speed of 6 microseconds. BSE is India’s leading exchange group and has played a prominent role in developing the Indian capital market. BSE is a corporatized and demutualised entity, with a broad shareholder base that includes the leading global exchange- Deutsche Bourse, as a strategic partner. BSE provides an efficient and transparent market for trading in equity, debt instruments, equity derivatives, currency derivatives, interest rate derivatives, mutual funds and stock lending and borrowing.
BSE also has a dedicated platform for trading in equities of small and medium enterprises (SMEs) that has been highly successful. BSE also has a dedicated MF distribution platform BSE StAR MF which is India Largest Mutual Funds Distribution Infrastructure. On October 1, 2018, BSE launched commodity derivatives trading in delivery-based futures contract in gold (1 kg) and silver (30 kg).
BSE provides a host of other services to capital market participants including risk management, clearing, settlement, market data services and education. It has a global reach with customers around the world and a nation-wide presence. BSE’s systems and processes are designed to safeguard market integrity, drive the growth of the Indian capital market and stimulate innovation and competition across all market segments.
Indian Clearing Corporation Limited, a wholly owned subsidiary of BSE, acts as the central counterparty to all trades executed on the BSE trading platform and provides full novation, guaranteeing the settlement of all bonafide trades executed. BSE Institute Ltd, another fully owned subsidiary of BSE runs one of the most respected capital market educational institutes in the country. Central Depository Services Ltd. (CDSL), associate company of BSE, is one of the two Depositories in India.
Yatin Padia / Rahul Vyas
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