NYSE Euronext to acquire 5-per cent stake in MCX

The world's leading financial market group NYSE Euronext (NYX), today said that it had signed a binding term sheet to acquire a 5-per cent equity stake in India's top commodity exchange, Multi Commodity Exchange (MCX), which is also operates the world's third-largest bullion exchange under the MCX banner.

Currently, there are 14 corporate listings from India on NYSE Euronext markets, 12 on the New York Stock Exchange and two on Euronext, whose combined total global market capitalisation exceeds $ 110 billion.

On July 31, 2006, MCX and NYSE Euronext's derivatives business Liffe entered a licensing agreement for MCX to use Liffe futures prices, enabling MCX to list domestic 'mini' futures contracts for both robusta and white sugar based upon Liffe futures prices and to identify other areas of potential collaboration.

In January 2008 it set active trading in carbon credit futures and in 2007 along with the Power Trading Company (PTC) set up India's first national electronic electricity exchange.

Owned by Financial Technologies India, MCX is India's largest and most diverse independent and de-mutualised multi-commodity exchange with futures trading in 56 commodities, accounting for 73 per cent of the total exchange traded commodities with a daily average turnover exceeding Rs10,000 crore.

MCX, founded in 2003, pioneered futures trading in crude, steel, cashew and mentha oil, in India, and plastic futures in Asia.
 
The equity investment is the maximum equity interest permitted by foreign investors in derivative exchanges under current Indian law. Closing of the transaction is expected to take place during the first half of 2008, subject to all relevant regulatory approvals.

Jignesh Shah, managing director and chief executive officer of MCX commented on the NYSE investment saying, " It is a statement on India's economic standing and we are proud to be part of it."

In addition to NYSE Euronext, other shareholders in MCX include: State Bank of India and its associates (SBI), National Bank for Agriculture and Rural Development (NABARD), National Stock Exchange of India Ltd. (NSE), SBI Life Insurance Co Ltd., Bank of India (BoI), Bank of Baroda (BoB), Union Bank of India, Corporation Bank, Canara Bank, HDFC Bank, Fid Fund (Mauritius) Ltd. - an affiliate of Fidelity International, ICICI Ventures, IL&FS, Kotak group, Citibank, Merrill Lynch and Financial Technologies.

Major NYSE Euronext locations:

• Belgium: Euronext Brussels 
• France: Euronext Paris 
• The Netherlands: Euronext Amsterdam 
• Portugal: Euronext Lisbon 
• UK (London): Euronext.Liffe 
• USA (Chicago): NYSE Arca (formerly Archipelago) 
• USA (New York):NYSE, Headquarters 
• USA (New York) AMEX (To be relocated to NYSE headquarters)
• USA (San Francisco): NYSE Arca (formerly Pacific Exchange)