Shares of the Mumbai-headquartered commodity bourse MCX (Multi Commodity Exchange) zoomed more than 10% in the morning deals on Friday on news reports of merger talks with NSE (National Stock Exchange) — India’s largest stock exchange by turnover and volumes. BSE (Bombay Stock Exchange), on which MCX shares trade, asked MCX to clarify the news reports of its merger discussions with NSE.
In response, MCX didn’t confirm the merger talks with NSE. “As a part of corporate strategy, the company continuously evaluates various opportunities for enhancing shareholders’ value. If and when any proposal is required to be considered by the board of directors of the company warranting disclosures, the same shall be informed to the exchange,” MCX said in a statement to BSE. “As of now, there is no information/event which requires disclosures,” it added.
NSE and MCX have entered into ‘merger talks’ and are planning to approach Indian capital market regulator SEBI (Securities and Exchange Board of India) ‘as early as this month’, a media report said, adding that National Stock Exchange entered into the merger talks with MCX after SEBI allowed exchanges to offer stocks and commodities at one place.
Shares of MCX were trading higher since the opening bell on Friday. The stock of MCX rallied as high as 10.62% to a day’s high of Rs 794 on NSE while the stock advanced 10.16% to a day’s top of Rs 792.7 on BSE on Friday. Unusual trading volumes were registered in the stock of MCX on Friday as the scrip was traded much higher as compared to its three-month average trading volumes. As at 11:51 am, more than 21.6 lakh equity shares exchanged hands on both NSE and BSE with about 19.6 lakh equity shares on NSE alone.
Earlier in late-December last year, Indian capital market watchdog SEBI allowed all the stock and commodity exchanges that they can facilitate trading in stocks and commodities derivatives from October 2018.
NSE is by far the largest stock exchange in India in terms of volume, turnover and several other parameters than more than 140-year old Dalal Street-based BSE. As at the end of April 2018, the combined market capitalisation of all listed companies on NSE was Rs 1,50,92,002 crore while on BSE it was Rs 1,52,79,535 crore. (listed companies on BSE are almost double than that of NSE).
In April 2018, the total turnover recorded on NSE was Rs 6,41,440 crore while on BSE it was Rs 71,630 crore (approx). At the end of January 2018 when Indian equities were trading at their all-time highs, the combined market capitalisation of NSE listed companies was recorded at Rs 1,51,40,453 with a turnover of Rs 8,14,839 crore.
NSE offers to trade and bid for securities such as equity shares, derivative securities (stocks, indices, currency, ), exchange-traded funds, mutual funds, IPOs (Initial Public Offerings), Offer for sale, security lending and borrowing scheme, bonds, bond futures, NCDs (Non-convertible debentures), sovereign gold bonds, corporate bonds etc.
While on the other hand, MCX offers to trade in derivative securities based on bullion (gold, silver), base metal (aluminium, copper, lead), energy (crude oil, natural gas) and agricultural commodities (black pepper, cardamom, cotton, crude palm oil). In the financial year 2017-2018, MCX recorded a turnover of Rs 5,61,863 crore in commodities futures and Rs 2640 crore (approx) in options contracts across all segments.