MCX and Financial Technologies

(Amey Desai) #21

mcx continues to fall day after day - any change in fundamentals or this is a secular fall ?

(narendra ) #22

MCX-SX promoted by FT/MCX opened with much less volumes.Also visit the site( most of the things doesn’t work and very slow.

They are into breeding the exchanges and if they cannot make the exchanges successful the share prices is bound to fall.

(manish) #23

i dont understand one thing, their stake in MCX-SX is ONLY 5 % each. So WHY we are giving so much undue importance to MCX-SX, even if it is successful which i believe so as i have full faith in the non-performing abilities of PSU/govt companies (BSE/NSE), it is not going to make much diff in the bottom line, at least for next few years.

Also, there is no guarantee that other pvt exchanges will not come up.

(Manish Vachhani) #24

I think that is the limit for the promoter’s holding in the exchange.

(Amey Desai) #25

@Manish Vachhani - his point is - if they have only a 5% holding in MCX-SX - why the hell so much importance ? unless this 5% is a big% of their overall investment and hence decides their add-on revenues

(Manish Vachhani) #26

Yes I know his point. I only wanted to make it clear why it is only 5%.

(narendra ) #27

No FT has around 33 % stake including warrants(and MCX alos holds around similar level) .They will liquidate these warrants in 18 months .

Please go though share holding pattern above

(narendra ) #28

It is very difficult to setup a new exchange under regulations.FT has to fight through courts to get approvals for the exchange.In African countries it is easy but takes takes time to make them profitable(In some African countries FT has set up exchanges and no other exchanges there).

(manish) #29

Promoters had initially higher stake in MCX-SX ( i dont remember how much) but since SEBI has put a limit on promoter holding in the stock exchange, FT and MCX reduced their stake and issued warrants to themselves. These warrants cannot be converted unless SEBI policy is revised in their favour. The warrants will remain warrants.

(Amey Desai) #30

Everything said & done - the MCX-SX has already been set up and running.

(Amey Desai) #31

For people who were not aware of this development

2nd-Feb-2013 11:07nullSource:BSE

MCX India)- Resignation of CFO

Multi Commodity Exchange of India Ltd has informed BSE that Mr. Hemant Vastani, Head- Finance & Accounts, has been assigned the role of the acting CFO of the Company with immediate effect following the resignation of current CFO, Mr. Mahesh Joshi.

(narendra ) #32

)— The warrants will remain warrants.

I donot think so.They can sell warrants , their combined equity should come down to 5%( right now more than 5%).There is some time period by which they have to comply all these.

I was thinking it is 18 months , but Motilal report says 3 years

“Also, both MCX
and FTECH need to sell their warrants in MCX-SX, for which they have a three year
window. If the volumes in MCX-SX ramp up slower than expected, it will have a bearing
on both FTECH’s and MCX’s valuations.”

(narendra ) #33

warrants is the reason why SEBI rejected this exchange initially , later got approval from court.

(Amey Desai) #34

how much dependence does MCX have on revenues coming from MCX-SX? is it equal to or more than 10% of their Annual revenues ?

I think Commodities Transaction Tax hangover is causing damage here.

(narendra ) #35

Right now it is 5% (Excluding warrants ) .

From annual report of MCX-SX ,both FT and MCX have option to sell warrants with in 3 years .Where as they have 18 months to bring combined holding to 5%.

Link :

"The Authorised Share Capital of the Company is 2,500,000,000/- divided into 2,500,000,000 equity shares of1/- each. The Paid up Capital of the Company is 544,557,900/- divided into 54,45,57,900 equity shares of1/- each.

A total of 1,196,630,000 transferable warrants issued under the scheme of reduction cum arrangement which was sanctioned by the Hon’ble High Court of Bombay are presently held by two shareholders. The said warrants are to be disposed-off within a period of 3 years from the date of notification of SECC Regulations i.e. June 20, 2012.
The promoters i.e. Multi Commodity Exchange of India Limited (âMCXâ) and Financial
Technologies (India) Limited (âFTILâ) have to bring down their shareholding in the Exchange to 5% limit within 18 months from July 10, 2012."

(narendra ) #36

FT to earn more than MCX from MCX-SX

(manish) #37

they can sell warrants but that will provide only 1 time gain, not a recurring one. a combined of 5 % is very low to cause any meaningful impact on the bottomline of FT and MCX.

FT will earn more as it will be providing the infrastructure and services to MCX-SX.

For FT, rather than MCX-SX the success of the overseas exchanges matter more.

(Amey Desai) #38

can anybody talk about the fall in MCX ?

(Mahesh C) #39

How has CTT affected MCX so far? Is CTT applied since yesterday? If some one knows how has it affected MCX’s volume please share.

(Amit) #40

MCX seems to be very attractively priced at the moment @P/E of about 13 and dividend yield of over 3%. However, the total traded value has fallen by about 10% YOY, mainly because of the fall in Gold/precious metal prices.

CTT will be applied from July 1

I too am interested in knowing how CTT will affect volumes.

I have no positions yet. what is holding me back is over dependence on precious metals/crude oil. Agricultural products make only 1% of traded value.