MCX-SX to launch equities trading on February 11

MUMBAI Mon Jan 28, 2013 6:19pm IST

Brokers engage in trading on their computer terminals at a stock brokerage firm in Mumbai March 25, 2008. REUTERS/Punit Paranjpe/Files

Brokers engage in trading on their computer terminals at a stock brokerage firm in Mumbai March 25, 2008.

Credit: Reuters/Punit Paranjpe/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - MCX-SX, India's new stock exchange, will begin trading of cash equities and equities derivatives on February 11, setting up what is expected to be intense competition with the country's two established bourses.

The upstart exchange has been gearing up to launch equities trading since last year and will compete against BSE Ltd and dominant player National Stock Exchange of India Ltd (NSE), each of which is preparing for initial public offerings to raise capital.

MCX-SX is likely to post muted volumes at first compared with the BSE and NSE, but its entry could lead to lower trading costs as the exchanges vie for market share.

Trading volumes overall look set to grow substantially in coming years as the Indian government pushes initiatives to bolster mutual fund and insurance investments in a bid to bring more retail investors into stock markets.

"I think there will be more competition between the exchanges and the kind of virtual monopolistic status of NSE would get reduced," said Paras Adenwala, chief investment officer of Capital Portfolio Advisors in Mumbai.

"Three exchanges would definitely increase the opportunities for traders multifold."

Equities and equity derivatives trading on MCX-SX will be officially inaugurated in a February 9 event to be attended by Finance Minister P. Chidambaram, the exchange said on Monday. Actual trading for investors will kick off two days later.

REGULATORY PROCESS

MCX-SX, controlled by commodity bourse Multi-Commodity Exchange of India Ltd (MCEI.NS) and trading software provider Financial Technologies (India) Ltd (FITE.NS), won approval last year from Indian market regulators to start equities trading after a long regulatory process.

The new exchange has registered 270 trading members with Securities and Exchange Bank of India, which oversees stock markets, and will shortly cross the 350 target it had set for itself as a condition to officially start trading, it said in a statement.

MCX-SX did not say how many stocks would be available for trading from the first day. A spokesman declined to comment beyond the statement.

Equities trading is dominated by NSE in India, which has overtaken older BSE in trading volumes.

The total value of share trading in the NSE reached $526.1 billion last year, compared with $110.3 billion on the BSE, according to data from World Federation of Exchanges. But combined, that's only about a quarter of the $2.6 trillion traded in China's Shanghai stock exchange last year, according to the same data.

The government is keen to bring more retail investors into stock markets under economic reforms aimed in part at re-energising the mutual fund industry and luring investors away from gold. Last year the finance ministry unveiled the Rajiv Gandhi Equity Savings Scheme, providing tax incentives for first-time retail investors.

"In line with the regulator's vision, our focus will be to increase the depth of markets, introduce new segments and strengthen participation of investors from across the country," said Joseph Massey, MCX-SX chief executive, in the statement.

(Additional reporting by Abhishek Vishnoi; Editing by David Holmes)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Public Health

REUTERS SHOWCASE

Cost Cutting

Cost Cutting

PM Narendra Modi boots officials out of the first class cabin  Full Article 

Airtel Profit Jumps

Airtel Profit Jumps

Bharti Q2 net profit more than doubles   Full Article 

Leisure Riding

Leisure Riding

Harley-Davidson woos affluent young Indians with bike culture  Full Article 

Maruti Earnings

Maruti Earnings

Maruti Suzuki net profit up 29 percent, beats estimates.  Full Article 

ICICI Results

ICICI Results

ICICI Bank Q2 profit up 15 percent, beats estimates.  Full Article 

Moody's on India

Moody's on India

Moody's welcomes India's policy steps, but wants to see more.  Full Article 

End Of QE

End Of QE

U.S. Fed ends bond buying, exhibits confidence in U.S. recovery.  Full Article 

Cook Comes Out

Cook Comes Out

Apple's Cook: "I'm proud to be gay"  Full Article 

Refining Margins

Refining Margins

BPCL aims to double refining margins with refinery expansion.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage