2nd Indian Derivatives Convention & Workshops 1998
26 and 27 May 1999, Bombay

Opening Session

Welcome Address
Mr. Gautam Bhardwaj
Managing Director
Invest India Economic Foundation

Theme Address
Dr. Ajay Shah
Assistant Professor
Indira Gandhi Institute of Development Research

Capital Markets : Need to regulate, not license
Dr. Surjit Bhalla
President
O[x]us Research & Investment

Questions

Technical Session 1

Index Futures
India's first financial exchange traded derivatives are likely to soon commence operations, when NSE and BSE start trading index futures under the aegis of the policy framework drafted by the LC Gupta committee. This will be a milestone in how equity market risk is handled in India. It is also likely to have an enormous impact upon market quality of the equity cash market.

Mr. N. Parakh
Divison Chief, Derivatives Cell
Securities and Exchange Board of India

Experiencing in Launching Index Futures in Other Countries
The talk will cover several aspects of Index Futures and derivatives; the current status of exchange traded derivatives in Asian equities markets, experience and lessons from past contracts, and a brief discussion of their impact on underlying equity markets aroudn the world.

Mr. Andrew Kai-Tak Wong
Director, Equity Risk Management
Warburg Dillon Read (Hongkong)

Technical Session II

Commodity Futures
Liberlisation in Indian agriculture is closely intertwined with growth of commodity futures markets. AFter decades of a highly restricted regime, policy makers are now seeing an important role for commodity futures A futures market on cotton, one of the most improtant agricultural commoditires in the coutnry, will soon commence operations. This session will discuss the scenario in commodity futures. It will also examine the exisiting and required institutional infrastructure for trading, clearing and settlement for commodity exchanges.

Presentations on Cotton Futures
Mr. Kishorilal F. Jhunjhunwala
Vice President
The East India Cotton Association

Panel Discussion

Summing up for the day

Invest India / Warburg Dillon read Special Guest Lecture

Introductory Remarks
Mr. Euan R Macdonald
Chairman, India
Warburg Dillon Read

Whither Financial Liberalisation ?
Dr. John Williamson
Chief Economicst
The World Bank

Technical Session 3

Forex & Fixed Income Derivatives
The Dollar - Rupee forward market is India's largest derivative market. There are manay interesting devlopments in the area of interest rates, particularly in the light of the heightened interest rate volatitlity since 1996. Yet, there is a sense that htere has been little market devlopment in the area of derivatives on forex and fixed income over the last 18 months. In this session, we take stock of the problems and issues faced in increased sophistication in these markets, and the potential for obtainig liquid, efficient markets by trading these products on an exchange.

oderator
Dr. Ajay Shah
Assistant Professor
Indira Gandhi Institute of Development Research

Panelists
Mr. Euan R Macdonald
Chairman, India
Warburg Dillon Read

Mr. Hari L Mundra
Chief Financial OFfier & Director
RPG Group

Mr. G Subramaniam
Vice President, Treasury
Reliance Industries Limited

Mr. Ashsih Kumar Chauhan
Vice President
National Stock Exchange of India Limited

Presentations
Problems & Directions
In this session, Mr. Miranda will take stock of the state of the play in fixed income and currency derivatives, and try to focus on the products which are the most important today, and the bottlenecks hindering the next stage of market development.

Mr. Luis Miranda
Head - Forex & Derivatives, HDFC Bank

Exchange Traded Derivatives in Fixed Income & Forex
Derivatives on fixed income and currencies could function at unprecendented levels of transparency, liquidity and market efficeincy if they were traded on an exchange. SEBI's policy framework for exchange traded derivatives now opens the way for this. Mr. Mecklai will discuss a few product designs which could readily come about in India today.

Mr. Jamal Mecklai
Managing Director
Mecklai Financial & Commercial Services

Panel Discussions & Questions

Technical Session 4

Integrity of the Financial System
One major source of concern around derivatives is the potential 'system risk' that could come about, leading to problems such as payments crisis, domino effects, failure of securities market, institutions etc.

Special Address
Derivatives - BSE's plans
Mr. Anand Rathi
Director
The Stock Exchange, Mumbai

Questions

Technical Session 5

The Derivatives Intermediary
Derivatives intermediation will require a new breed of intermediaries when compared with existing brokers in India. These intermediaries are more likely to take principal positions, give high level knowledge and consulting support in planning and executing derivatives trades, and are more likely to be better capitalised. In this session, we look at three case studies of building a derivatives business from an intermediary's perspective.

Moderator
Dr. Ajay Shah
Assistant Professor
Indira Gandhi Institute of Development Research

Panelists
Mr. R C Mathur
Executive Director
The Stock Exchange, Mumbai

Mr. Ravi Narain
Deputy Managing Director
National Stock Exchange of India Limited

Mr. N. Parakh
Division Chief, Derivatives Cell
Securities and Exchange Board of India

Presentations
A Bank's Perspective
Banks take principal positions on OTC derivatives, and banks have a major role in the planning and execution of derivatives trading strategies by their corporate clients. Mr. Sethi will talk about the evolving derivatives activities of banks, and high light the issues involved in building a derivativees business.

Mr. Arivind Sethi
Managing Director, Global Capital Market Group
Bank of America

Opportunities in Derivatives IntermediationBrokers in India's cash markets have increasingly become low value - added execution services, which command insicule brokerage fees owing to the automated exchanges with near-free-entry into brokerage. Derivatives will throw up a unique opportunity in terms of value added in brokerage in the form of advice and decision support and principal trading in doing arbitrage. Mr. Price will shed light on how profits may be found in brokerage on the index futures market.

Mr. Dominic Price
Country Head
J.P. Morgan

A Foreign Broker's Perspective
Foreign brokerage firms have strengths in the form of knowledge about derivatives; commitment of top management, and links to foreign clients who want derivativs. This generates a unique set of opportunities and challenges for foreign brokers. Mr. Shah will talk about how profits may be found in the index futures market for a foreign broker.

Mr. Sanjiv Shah
Senior Vice President
DSP Merrill Lynch

Panel Discussion & Questions