NYSE eyes more stake in MCX, NSE

The NYSE Euronext is betting big on India. Not only does it intend to raise its stake in the National Stock Exchange (NSE) and the Multi Commodity Exchange (MCX) once foreign ownership rules are eased, but it also has plans to partner the two Indian bourses in developing their business.In the years to come, India could be one of the markets where the NYSE Euronext lists its shares, along with China and Japan, which are alos on the radar.

NYSE, a subsidiary of the NYSE Euronext, owns a 5 per cent stake in NSE, while the parent had earlier this year signed an agreement with MCX to acquire a 5 per cent stake in the commodity exchange (Related Story). The MCX deal is expected to be closed by June this year.

Read more in The Business Standard article.

Deutsche may buy 5% in DSE

German multinational bank, Deutsche Bank, is likely to buy a 5% stake in the Delhi Stock Exchange (DSE). If the deal happens, this would be the fourth major foreign investment in DSE after US-based Lamb Company, New Vernon Private Equity and Passport Global Master Fund SPC (British Virgin Islands) picked up stakes in the stock exchange.

The DSE got de-mutualised in August 2007 and has around 2,800 companies listed on the exchange with 1,800 companies trading exclusively on it.Earlier, the Foreign Investment Promotion Board (FIPB) had approved four foreign investors — Wilmette Holdings, Mauritius, Noor Financial Investment Company, Kuwait, Ikarus Industrial Petroleum Company, Kuwait and Kuwait Privatisation Projects Holding Company, Kuwait to pick 5% stake in the DSE, but the deal didn’t work out. DSE executive director Harjit Singh Sidhu declined to comment on the developments.

After the government announced that it will allow up to 49% foreign stake (including both FII and FDI) in Indian exchanges, a list of foreign companies have bought stake in Indian stock exchanges. The latest expression of interest came from Nasdaq, the largest electronic equity securities trading market in the US, to partner with Ahmedabad Stock Exchange (ASE).

Earlier this year, NYSE Euronext bought 5% stake in the Multi Commodity Exchange (MCX) for $55 million. The government has, however, capped foreign ownership for a single investor in commodities exchanges at 5%.

At DSE, foreign stake holders hold 15% stake and 36% stake is with private investors such as Parsvnath, Omaxe, BCCL and NDTV. Analyst believe that investment from foreign partners will add value and help regional exchanges acquire advanced technology.

MCX to hit market with Rs 600-cr IPO

The largest commodity futures bourse in the country - Multi Commodity Exchange of India (MCX) - is all set to hit the primary market with an initial public offering (IPO). The commodity exchange is likely to announce its long-awaited IPO within a week. Sources said, MCX would sell 10% stake, through a mix of fresh shares and an offer for sale, to raise around Rs 500-600 crore.

According to sources, fresh shares will contribute the majority of the offering while the offer for sale will account for 2-3%. An offer for sale refers to the sale of promoter's existing equity to the public. The bourse has been valued at around $1.2-1.3 billion. The issue is being managed by DSP Merrill Lynch, Kotak Securities and Enam Financial. MCX has been mulling over listing on local bourses for the past two years.

Sources said, IPO would provide many of its Indian and foreign investors an exit route. Around 24% of MCX is owned by foreign investors. While Fidelity holds 9%, Merrill Lynch and Citi own 5% each. The other investors include US-based Passport Capital (3%) and the UK-based fund GLG (2%).

Read more in The Economic Times article.

NYSE, Nymex line up to buy stake in MCX

The New York Stock Exchange (NYSE) and the New York Mercantile Exchange (Nymex) are awaiting policy guidelines on foreign direct investment (FDI) in commodity exchanges to pick up minority stake in Multi Commodity Exchange of India (MCX). The guidelines may be announced on Friday.MCX, the largest commodity futures bourse, is promoted by the Mumbai-based Financial Technologies (FTIL).

When contacted an MCX spokesperson said that the exchange has been long awaiting the government policy on foreign investments. While the transaction value under discussion is not clear, sources say that it could be in line with the previous stake sale. Last week, FTIL offloaded around 10% stake in MCX. ICICI, IL&FS and Kotak acquired 3.55%, 5%, 1% stakes, respectively, at an enterprise value of $1.1 billion (around Rs 4,400 crore). With this, FTIL's holding in MCX has come down to 37.5%.

MCX and National Commodity & Derivatives Exchange (NCDEX), which run two leading national commodity bourses, have been pioneers in attracting foreign investors. While Fidelity had picked up 9% in MCX, Goldman Sachs had bought 8% in NCDEX. NCDEX had later sold 7% to Inter-Continental Exchange (ICE) as well.

Read more in The Economic Times article.

Merrill Lynch, Citigroup buy 10% in MCX

Global financial services firms Merrill Lynch and Citigroup have picked up five per cent stake each in the country's biggest commodity exchange MCX for a total of about Rs 480 crore.

Financial Technologies (India) Ltd, the parent company of Multi Commodity Exchange of India, sold the stake. FTIL has also entered into agreements to offload three per cent and two per cent stake to two foreign funds - Passport India Investment (Mauritius) and GLG Financials Fund, respectively.The transactions put the enterprise value of MCX at over USD 1.1 billion (Rs 4,400 crore).

FTIL will get about Rs 720 crore from selling 15 per cent stake in MCX, an exchange official said. With the sale, FTIL's shareholding in MCX will come down to 49 per cent, he added.

Read more in The Economic Times article.

FTto set up corp bond bourse

Financial Technologies, which is also the promoter of commodities derivatives exchange MCX, has submitted the proposal to the Securities and Exchange Board of India,plans to set up an exchange for illiquid corporate bonds.The company recently got the government approval to set up an energy exchange

The move is a part of Financial Technologies strategy to take advantage of opportunities in the business of running exchanges. The company also has plans to start an exchange for trading in shares of small and medium enterprises.

The company, which also holds 49 per cent stake in the Dubai Gold and Commodities Exchange, recently received the go-ahead from the CentralElectricity Regulatory Commission to set up Indian Energy Exchange. The proposal submitted by Financial Technologies envisages a demutualised exchange, wherein strategic and financial investors would hold equity stakes. An official spokesperson of Financial Technologies declined to comment.

According to the Securities and Exchange Board of India (Sebi) data, trading in corporate bonds, including over the counter trades and trading through exchanges, stood at Rs 53,664.26 crore between January and August.

In this month (till September 20), the trading stood at Rs 532.66 crore. Market sources said in the absence of primary market reforms, actual trading in bonds would not take place and even a separate corporate bond exchange is set up, it would only diversify the present trading.

Read more in The Business Standard article.

FMC may decide on BSE stake in NMCE by next week

Forward Markets Commission is likely to take a decision soon on the proposal of Bombay Stock Exchange to buy 26% stake in Ahmedabad-based National Multi Commodity Exchange (NMCE).

The commodity market regulator had in December asked all agri-bourses to maintain status quo in their shareholding pattern till guidelines were issued. The decision came after foreign firms Goldman Sachs and Fidelity bought stakes in Indian agri exchanges MCX and NCDEX.An NMCE official said the discussions on BSE’s offer to buy a stake were going on for the last several months.

If BSE is allowed to buy 26%, it would be highest by a stock exchange in any commodity exchange.The National Stock Exchange has 15% stake at leading agri commodity bourse NCDEX.

Read more in The Livemint article.

MCX eyes $750-b turnover, will expand to Mauritius

The MCX commodity exchange expects a turnover of at least $750 billion this fiscal year and will launch an exchange in Mauritius as part of an international expansion.Reforms, such as allowing new kinds of forward contracts or algorithmic trading in India, are pending approval and Lamon Rutten, joint managing director of MCX, said a go-ahead for just two measures would take volumes to $1 trillion this year.

In the last fiscal year running to the end of March, turnover at Multi-Commodity Exchange (MCX), which was launched in 2003, totalled $480 billion.

Rutten said the aim was for MCX to become one of the top five futures exchanges in the world within five years, from its current ranking at 10th, which already makes it bigger than the New York Board of Trade (NYBOT).

MCX, which together with its parent company holds a 49% stake in Dubai Gold and Commodities Exchange (DGCX), also plans to launch a multi-asset exchange in Mauritius this year, targeting offshore players.

Another project will be announced later, he said, adding that MCX was looking at Asia. Rutten declined to give details. He also declined to comment on any involvement in a new commodities exchange in Egypt, which Cairo is planning for next year.

Read more in The Economic Times article.

Chicago, Nymex may pick up 5% each in MCX

The country’s three leading commodity exchanges are in the final stages of negotiations with their global counterparts for a possible stake sale even as the government is set to announce foreign investment guidelines for comexes in the next few days.

While the Chicago Mercantile Exchange (CME) and the New York Mercantile Exchange (Nymex) are expected to pick up 5 per cent stake each - the maximum to be allowed to a single entity under the policy - in the Multi Commodity Exchange of India (MCX), the US-based Intercontinental Exchange (ICE) is in talks with the National Commodity & Derivatives Exchange (NCDEX).

Exchanges are getting the highest valuations in the global marketplace and sources close to the developments said Nymex may buy stake in MCX based on an enterprise value of $1 billion. The Ahmedabad-based National Multi-Commodity Exchange (NMCE) is also looking at a strategic partner and is in talks with various international and domestic exchanges. The Bombay Stock Exchange is believed to be one of the contenders.

Read more in The Business Standard article.