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India by the numbers: a guide to its markets

Published in Automated Trader Magazine Issue 26 Q3 2012

The world's most populous democracy with 1.2 billion people, India is used to doing things on a big scale. But a scan of some of the key numbers shows there is still plenty of room for more growth. Here are some statistics about the country and its markets.

Commodity markets

• MCX's world ranking among top derivatives exchanges: 9th

• Many of its contracts are among the world's most traded, although that also reflects contract size.

• MCX crude oil futures ranking: 5th (contract is 100 barrels versus 1,000 barrels on other exchanges)

• MCX Natural gas futures ranking: 15th (also reflects contract size) (source: Futures Industry Association)

Currency market

• USD/INR is the 20th most traded pair in the world with 1 percent of global turnover and daily turnover: $27.4 billion. (source: Bank for International Settlements)

• USD/INR ranked 1st among FX contracts but that also reflects contract size. (source: FIA)

Equity markets

In line with trends in markets elsewhere, new equity issuance in India has trailed off. It was $8.4 billion in 2011, down from $25.8 billion in 2010 and $17.8 billion in 2009. (source: BIS)

The country's equity derivatives market is buoyant, however, with some of the most actively traded contracts in the world. Some of that reflects contract size but it also demonstrates healthy participation both by institutional and retail investors.

International debt securities

Amount outstanding (in US$ billions) as of March 2012: 61.4. That is up 7 percent from end-2011 and up 33 percent from end-2009.

Despite the country's size, India's debt securities market lags a number of emerging market countries. China's outstanding issuance is more than 2-1/2 times as large with $164.5 billion and even Poland has a larger amount at $72.8 billion. These numbers are dwarfed by those of developed countries, with $7.5 trillion for the United States and $3.2 trillion for the UK. (source: BIS)

Fund industry

• Growth in assets under management over last 5 years (2006-2011): 155%

• Number of private sector mutual funds offering services in equity, debt and gold: 41

• Number of SEBI-registered Foreign Institutional Investors as of last year: 1,722

• Net FII investment: $32.2 billion in 2010-11 versus $30.3 billion in 2009-10. (Source: Ernst & Young)

Education

India has been churning out a virtual army of mathematics PhDs and financial engineers. The country boasts the largest number of higher education institutions in the world, with 567 accredited universities, more than 25,000 colleges and thousands of technical institutions. (sources: Ernst & Young and India's University Grants Commission)

This article is part of an Automated Trader series exploring algorithmic trading in India. Read about prospects for algorithmic trading in India here .

Subscribers can also read about new algo rules by Indian regulator SEBI , competition among Indian exchanges and what Asia's largest fund has been up to in India.