Liquidity key as India's new stock exchange MCX-SX set to launch
The number of available counters announced by MCX-SX in a statement is about two-thirds of the 1,665 offered by dominant player National Stock Exchange and a fraction of the 5,191 in the older BSE Ltd as of the end of December, according to data from World Federation of Exchanges.
However, these numbers include thousands of illiquid stocks, making it a far less important barometer for traders, most of whom welcome MCX-SX entry as trading costs are expected to fall as the three exchange compete for market share.
Whether MCX-SX can succeed in a country where the value of shares traded remain a fraction of those in the Shanghai Stock Exchange will depend mainly on how successfully the bourse can attract liquidity, especially from established brokers.
"Liquidity is going to be a challenge for MCX and they will have to act to get market makers initially for most instruments," said Abhay Jain, equity advisor at SSJ Finance and Securities in Mumbai.
MCX-SX, controlled by commodity bourse Multi-Commodity Exchange of India Ltd and trading software provider Financial Technologies (India) Ltd, will start trading operations on Monday after a long regulatory approval process.
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
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