London Stock Exchange To Deepen India Ties

The owner of the London Stock Exchange (Other OTC: LDNXF - news) (LSE) is to unveil a deal today aimed at deepening its ties to India weeks after the first visit to the UK by an Indian prime minister for a decade.

Sky News has learnt that the LSE Group is to sign a memorandum of understanding with India's National Stock Exchange that will pave the way for the launch of a joint research centre.

Sources said that Xavier Rolet, the LSE Group's chief executive, and Chitra Ramkrishna, managing director and chief executive of the NSE, would each sign the MoU in London later on Wednesday.

The research centre is expected to launch products and services in a range of capital markets areas, underlining moves by exchange-owners to forge closer relationships in financial centres in different parts of the world.

A source said the MoU would also aim "to explore further collaboration between the group companies including in indexes and debt market development".

It (Other OTC: ITGL - news) will follow similar agreements struck between the London bourse's parent and exchanges in Kazakhstan and other emerging markets.

The LSE previously signed a letter of intent with the NSE in 2010 which led to the ability to trade FTSE 100 options in India.

Downing Street claimed last month that the visit to Britain by Narendra Modi, the Indian Prime Minister, had spawned £9bn of bilateral trade deals, although some of these were subject to criticism that they were re-announcements of earlier agreements.

The LSE has long been established as a key destination for Indian companies wanting to raise capital, with its parent boasting on its website that more than "twice the number (of companies) in New York, Toronto, Singapore and Frankfurt combined have listed and raised strategic equity capital through IPOs and follow-on offerings on London’s Main Market and on AIM [the junior London market]".

Mr Modi's visit also coincided with the issuance of the first "masala bonds", rupee-denominated bonds issued outside of India, in London.

More than £1bn-worth of such debt was issued, including the first private sector one from Indian bank HDFC.

"Just as Britain’s Victorian engineers helped to build the great railways of India, so now Indian firms are helping to build Britain's future as the capital of global finance," George Osborne, the Chancellor, said last month.

"We are becoming India’s number one partner for inward investment now and in the years to come, which is why I’m delighted with the announcements reached to put Britain’s financial markets at the heart of funding India's rapidly growing economy."

A spokesman for the LSE Group declined to comment ahead of the MoU signing with the NSE.