Clearstream to add Indian rupee securities to financial tools

"We are working on this and I hope we can do it very soon, sometime next year," Philippe said in an interview with PTI.

"International investors are very keen on investing in India. The interest comes mostly from our private banking customers and most of them have established an India desk in their Asian offices," said Metoudi on the sidelines of the Futures Industry Association's Asia Derivatives conference, being held from November 29 to December 1 in Singapore.

"The demand comes from our customers with keen interest in India and in-depth knowledge of Indian corporations," said Metoudi, adding that the confidence also comes from the strong Indian banking sector, with banks maintaining clear balance sheets.

Clearstream has a global base of 2,500 customers, including 1,000 in the Asia-Pacific.

Though India's restrictive regulations limit global investors' exposure to the market, Metoudi said there was an urgent need for India to connect with the world's ever-growing and customer-driven opportunities.

Clearstream is in the process of appointing an Indian bank as an agent in India.

"Clearstream will establish an electronic link with the selected agent and venture into the Indian market," he said, disclosing, "We have a team in our Singapore office working on establishing this link."

Clearstream has also been dealing with India-based companies for decades, said Metoudi, pointing out that Indian issuers have issued 347 eurobonds, some of which have already matured and some of which will mature many years down the road, right through to 2027.

The earliest issuances date back to 1970.

"Indian investors have huge appetite for funding and raised their profile in the global financial market from 2005 onward," he said.

Metoudi said he expected Indian companies to continue tapping the euro market and US-dollar denominated eurobonds for now, as they had done so in the past.

Indian banks, though facing restrictive regulations at home, were active in global financial markets through branches in Singapore, Hong Kong, Dubai and London.

"Though for now the Indian gigantic bond market is for the domestic investors, a change is widely anticipated in the coming years, especially by the pent-up demand from the international market," Metoudi said.

"In the future, most of the bond issues would be in local currencies, which could bring about regulatory changes, and that too at an accelerated pace, to open the Indian market to foreigners," said Metoudi, without hazarding a guess on a likely timeframe.

Global traders, including central banks, were already looking for financial tools outside the G7 countries, especially in South Korea, Singapore and Israel.

Taking these cues, Clearstream has put Indian bonds on its list, he said.

Clearstream handles settlement, custody and securities financing globally for its parent group Deutsche Borse, which has a 5 per cent stake in the Bombay Stock Exchange.