Turnover: MCX-SX beats BSE

The newest stock exchange MCX-SX, which is expediting sale of promoters' equity in compliance with regulatory norms, should be valued more than $2 billion going by the comparison its CEO Joseph Massey is drawing with the BSE in terms of value and turnover.

"BSE's valuation is $1.2 billion and its turnover is just about Rs 5,000 crore (Rs 50 billion)... Our turnover is more than double of that with just one product i.e. currency futures ... With this you can draw your conclusion," Massey told PTI when asked about MCX-SX's valuation.

Wishing to go full swing for trading in all the products ranging from equity to interest rate futures from April 1, 2010, it is expediting the process for promoters' stake sale in accordance with regulator SEBI's conditions.

"Ideally we would like to start the year from April 1 with all the products for trading.... We have asked the bankers to expedite the stake sale process," he said.

He said the last tranche of stake sale in August had got the exchange value of Rs 5,000 crore (Rs 50 billion). Now, MCX-SX is leading player in currency future trading and with a turnover of over Rs 10,000 crore (Rs 100 billion) a day has a market share of 52 per cent.

All these would go into deriving the value of the exchange, he indicated.  Financial Technologies India (FTIL) and MCX, the leading commodity exchange in the country, have about 30 per cent equity each and the same has to be brought down to five per cent each by September for the MCX-SX to enable trading in other products.

"We have asked our bankers (Deutsche Bank AG and Nomura Financial Advisory) to expedite the process. They are already in talks with banks and financial institutions for selling the stake," he said.

As per market regulator SEBI norms, no single entity can hold over 5 per cent in a bourse, barring some entities like stock exchanges and banks that are allowed up to a 15 per cent stake.

"We have started looking for buyers. We are talking to banks, financial institutions as well as global stock exchanges for selling the 48 per cent promoter stake and bring it down to 5 per cent each," he said.

"We would wish to complete the divestment process ahead of the schedule and start all new products by April 1, 2010," Massey said.

In the first round of divestment, MCX-SX sold about 6.5 per cent stake to Union Bank of India (UBI) and Bank of India (BoI). Besides, FTIL had sold 5 per cent stake in MCX-SX in June earlier.

Asked whether MCX-SX is looking at LIC, Joseph Massey said, "It is worth talking to a big investor like LIC."