Analysis
What’s next post T+1?
The US, along with Canada, Mexico, Argentina, Peru and Jamaica, successfully migrated from a T+2 settlement cycle to T+1 in late May, joining India and China as trailblazers in settling trades just one business day after transaction. The total stock market capitalisation of these eight countries combined accounts for over 60% of the global market. This not only spurs other markets to expedite their own transitions to T+1, but also sparkles interest in looking for ways to slash the settlement cycle further.
India’s derivatives trading boom
India’s derivatives market boom has attracted millions of young and inexperienced investors participating in the speculative frenzy. A survey revealed that nine out of ten individual traders lost money in 2023. Indian regulators are concerned about potential market instability.
Spotlight on sovereign wealth funds
There are now 33 state-owned investment funds in Asia, overseeing US$5.4 trillion of assets collectively. It’s not just the developed nations that have formed wealth funds. Less developed ones have followed suit, and some of them have run into controversy.
A new chapter, a win-win collaboration
Singapore and Indian exchanges are collaborating to deepen liquidity of Indian stock markets with a new cross-border trading platform, GIFT Connect, for derivatives contracts.
A tale of two nations: demographic changes of China and India
India is expected to overtake China as the world’s most populous country this summer. This is a significant milestone for both China and India, marking the beginning of a new future for their national development.
India coming to the fore
Solid economic fundamentals and growth policies make India a compelling investment destination. Its attractive growth story has increasingly prompted foreign investors to upgrade Indian stocks into a dedicated allocation in their emerging-market investment portfolios.
Moving to T+1 settlement
Shortening the securities settlement cycle to T+1 will have a profound impact on global financial markets, helping to cut risk in volatile markets. In the Asia Pacific, India has begun T+1 implementation with a phased approach.