Since CDSL is promoted by BSE, are MCX and BSE being merged??
Certainly this is a strange development in the back drop of NSE and MCX merger talks. Incase NSE/MCX talks materializes, then competitors are also partners(NSE will have a stake in BSE entity).
Getting market share from MCX might not be that easy??
While the article may be right about difficulty in procuring spot settlement prices, it would also intuitively mean that for MCX to protect its ground it would have to pay more convert its non-exclusive contracts to exclusive ones.
The quantum would obviously depend on the ratio of exclusive vs. non-exclusive contracts and the need for MCX to protect itself from competition.
Either way, competition is going to bring margin pressure for the incumbent with reduced pricing power on both the supplier and customer front.
It is an interesting space to observe for the next 2 years as to how changing competition dynamics and regulation bring about changes in the business model.
MCX plans currency derivatives foray…
Q1 results are not that great
MCX - Q1 FY19 (Cons)
Net Income (23.1%) 72.87 Cr vs 59.19 Cr YoY
Net Profit of (-72.1%) 7.33 Cr vs 26.30 Cr YoY
EPS (in Rs.) 1.44 vs 5.17 YoY
the net profit was down bcz of one time exceptional item, excluding that net income was flat YoY.
Exceptional item was unrealized/notional loss on bonds and shares
MCX ADTV is now hitting 30,000 Crores. A year or so back it was 20,000 Crores. The incremental volumes should ideally start contributing to the profits as op-lev is huge in this business. Options are also now hitting ~ 1000 Crores ADTV number, the month gone by saw ADTV at 2500 Crores for options!
Competition, has also entered and that space remains to be seen how it will play out. BSE ,as stated earlier, has launched their commodity derivatives platform on 1st October. Interestingly NSE hasn’t yet launched their commodity derivatives, it was supposed to launch on 1st October like BSE.
NSE launching on 12th October
Quoting from an article:
“We expect people who are familiar with BSE and not trading on MCX to trade with us. Of the 1,400 registered members, 450 have already taken membership in the commodity exchange,” he said.
The above is what MD and CEO, BSE, said. So, is BSE targeting non-MCX client?