Fidelity acquires 9-per cent stake in MCX for $49 million
By Mumbai: | 06 Feb 2006
MCX is an independent and de-mutualised multi-commodity exchange with permanent recognition from the government of India and is ISO 9001:2000-compliant. It provides state-of-the-art, online trading, clearing and settlements to Indian commodity futures markets.
Key shareholders of MCX include Financial Technologies (India) Ltd, State Bank of India (with all its seven subsidiaries), SBI Life insurance Co. Ltd., National Stock Exchange of India Ltd. (NSE), National Bank for Agriculture and Rural Development (NABARD), HDFC Bank, Union Bank of India, Canara Bank, Bank of India, Bank of Baroda and Corporation Bank
MCX
offers futures trading in 56 commodities. It has pioneered
futures trading in crude, steel, cashew and mentha oil,
in India, and plastic futures in Asia. It is India's
largest and the world's third largest bullion exchange
and has over 1,000 member clients, at 500 locations,
operate through 5,000 MCX terminals. MCX clocks an average
daily turnover of over Rs4,000 crore.
It accounts for 53 per cent of total market turnover of Indian commodity and futures market and the remaining 47 per cent is accounted for by 23 exchanges and two commodity exchanges. MCX has a market share of over 80 per cent of global commodities (Source: January 2005 turnover report of the commodity exchanges regulator Forward Markets Commission [FMC] ).
According to Jignesh Shah, managing director & CEO, MCX, "This investment by Fidelity International in MCX proves that strategic ventures of financial technologies (FT) such as MCX, DGCX, NSEAP have huge value appeal for knowledgeable investors. It also clearly demonstrates the success of the most innovative and unique business model of 'FT - the factory', that has incubated numerous such highly rewarding domain ventures which are beyond conventional ' sum of parts, logic.'
He
further added, "We are extremely happy that a top
class investor like Fidelity International has decided
to invest in MCX. This investment reinforces MCX philosophy
of 'The Best Partners The Best'. Our relationship with
Fidelity, which is the largest FII investor in parent
company of MCX viz. Financial Technologies is going
to be further strengthened with this investment by Fidelity
in MCX.''
MCX says its financial ratios are fully comparable to
leading exchanges like NSE and CME. Despite being an
infrastructure project MCX has a track record of maiden
dividend pay-out and reporting profits in its first
year of operations.
MCX has six international tie-ups — The Tokyo Commodity Exchange (TOCOM), The Baltic Exchange, Chicago Climate Exchange (CCX), New York Mercantile Exchange (NYMEX), London Metal Exchange (LME), Dubai Metals & Commodities Centre (DMCC) a strategic initiative of Government of Dubai to set up DGCX.