For expanding its outreach through providing risk management services against currency fluctuations to exporters in small and medium towns, MCX Stock Exchange Ltd (MCX – SX) has planned for entering into alliances with various regional trade bodies. The exchange is specifically targeting smaller urban centres for expanding services in currency trade.
Due to its focus on providing small exporters with a platform for hedging their currency risk against volatility in the currency in the market, MCX-SX’s daily average turnover has increased significantly since its launch in October 2008.
“Within the last six months, the daily average volume of trade has increased from Rs 200 crore in October 2008 to close to Rs 1,700 crore in February 2009,” U Venkatarman, CEO, MCX – SX, told FE. He said that till March 13, the daily average volume has been to the tune of Rs 2000 crore.
According to Venkatraman, small exporters in towns like Baranasi, Kanpur, Moradabad in Uttar Pradesh have shown a keen interest in participating in the MCX-SX platform. Recently, MCX-SX promoted by the Multi Commodity Exchange of India (MCX) and Financial Technologies India, has entered into an agreement with leading trade association of Uttar Pradesh, Kanpur-based UP Sarafa Association (UPSA).
“This would enable members of the UPSA to participate in modern trade mechanisms enabled by our platform besides getting the latest information on specific commodities,” Venkatraman said. The exchange has signed a similar MoU with six trade associations in Rajasthan for disseminating knowledge about currency hedging along with providing a transparent platform for currency trade.
MCX-SX has already made a pact with the Federation of Indian Exporters Organisation for reaching out to reach more than 11,000 exporters across the country.
The exchange also launched its first ever website in Hindi, Gujarati, Marathi, Tamil, Malayalam, Kannada and Telugu on currency futures trade and four more regional websites would be launched shortly, Venkatarman said..
“Our platform offers participants the benefits of high liquidity, trade transparency, easy online accessibility and counterparty guarantee,” he said.
Besides providing a trading platform, the exchange has been focussing on knowledge dissemination on various commodities to small and medium enterprise, corporates, banks, importers and exporters across the country.
According to an exchange statement, more than 120 training and awareness programmes in association with the Foreign Exchange Dealers Association of India, Institute of Chartered Accountants of India, Center of Corporate Research and Training under Institute of Company Secretary of India have been organised during the last few months. MCX-SX operates under the regulatory framework of the Securities and Exchange Board of India and the Reserve Bank of India. MCX is the country’s biggest commodity exchange, with a market share of more than 80%.