Indias largest IT player in infrastructure management services HCL Technologies has outbid global majors such as IBM, CSC and HP to wina $79-million deal to manage the IT infrastructure of Singapore Exchange. HCL Technologies on Monday said that it has signed a five-year IT infrastructure outsourcing agreement worth S$110 million, to establish a state-of-the-art data centre and seamlessly connect other global trading hubs to Singapore Exchange (SGX).
BSE listed HCL Technologies stock went up Rs 12, or 3.3 percent, following the announcement of the deal. SGX stock listed on its own exchange went up marginally to close at S$7.5.
Industry sources said that HCL Technologies was the sole Indian bidder amongst the seven players that bid for the deal. The deal may open doors for Indian IT companies as many global stock exchanges are looking at IT restructuring, reducing latency and cutting costs.
Singapore Exchange s (SGX) deal with HCL is part of a $192 million initiative to create the world s fastest trading engine. Exchanges around the world are aiming at reducing latency times by nano seconds in their trading hubs.
Even a minor time difference between trading hubs can mean a profit or loss of millions of dollars.
HCL Technologies said its experience in working for the National Stock Exchange and Indian commodity exchanges helped it bag the deal. As for the trading engine, S$70-80 million is being spent on a Nasdaq OMX trading system, which the SGX said will bring trading time down from 10,000 microseconds to around 90 microseconds.
"From Q3 next year and the couple of initiatives were doing now, we would hope to see high frequency trading as well as other customers joining SGX," said Caisley.
The Reach initiative aims to provide the worlds lowest trading latency and establish a world-class data centre for the exchange. So far, 40 per cent of SGXs broking members have signed up for the initiative.
We also have a large presence in banking and capital markets division. However, this is the first global stock exchange in our kitty. Revenues from the deal should start flowing in from the October-December quarter, this year,” said Kiran Bhagwanani, senior vice president and world-wide head of system integration sales, infrastructure services division, HCL Technologies.
It will manage, monitor and consolidate the exchanges IT infrastructure out of Jurong (Singapore) and Noida in India, with a team of over 100 people. The five-year deal is extendible by three years.
Bob Caisley, executive vice president and CIO at SGX said that the implementation of the IT initiative will ensure SGX s position as a leading listing venue for international issuers.
The exchange had a market capitalisation of over $650 billion in January, this year.