Tag: MCX

MCX gains over 4% on FPI’s participation in select commodity derivatives

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Multi Commodity Exchange of India (MCX) gained more than 4% on Monday following a go-ahead to the foreign portfolio investors (FPIs) to participate in certain cash-settled non-agricultural commodity derivatives contracts and indices.

A circular issued by MCX on April 20 said that FPIs falling under the categories of individuals, family offices and corporates will be allowed to engage in eligible cash-settled non-agricultural commodity derivatives contracts, as well as indices comprising such cash-settled non-agriculture commodities.

“Foreign Portfolio Investor(s) (FPIs) falling under the category of Individuals, Family Offices and Corporates will now be permitted to participate in eligible cash settled non-agricultural commodity derivatives contracts and indices of such cash settled non-agriculture commodities. FPIs belonging to categories viz. Individuals, Family Offices and Corporates will be allowed a position limit of 20% of the client level position limit in eligible commodity derivative contracts and indices,” the circular read.

What does this mean for FPI participation in MCX?

While precious and base metals predominantly constitute delivery-based contracts, FPIs will now have the opportunity to take positions only in crude oil and natural gas-based derivatives, which are cash-settled contracts.

In the first nine months of fiscal year 2024, energy contracts constituted approximately 78% of the average daily turnover in both options and futures trading on MCX. Additionally, MCX accounted for a market share of 99.52% in Indian energy futures.

What are the positives for MCX?

This move by MCX is anticipated to yield several positive outcomes. Firstly, it is expected to increase FPI participation on the exchange platform. Secondly, it also has the potential to boost trading volumes.

MCX shares were trading at ₹3,923.4 apiece, up 3.48%, on the NSE at 2:48 pm.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

PFC and MCX are the most owned mid and small cap stocks by mutual funds

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mutual fund industry owns nearly 38 crore shares of Power Finance Corporation (PFC), which is valued at ₹16,803 crore at the end of January. This makes the state-owned company topping the list of mid-caps, with the highest holdings by fund houses in the country.

Shares of PFC have rallied as much as 244% over the last one year, which has taken the value of mutual funds exposure to the current level from about ₹8,000 crore in August 2023. Additionally, mid-tier information technology (IT) companies like Coforge and Persistent Systems are also among the most owned mid cap stocks with an investment value of ₹16,000 crore and ₹14,000 crore, respectively.

Source: primemfdatabase.com

However, unlike other public sector undertakings (PSUs), the Power Finance Corporation has a higher number of shares available in the market for trade. As per the latest shareholding data, the government holds 56% in the company, whereas the remaining 44% is held with the public. Interestingly, more than a fourth of public holding, i.e. 11.64% of PFC is held with mutual funds.

When it comes to the smaller stocks, Multi Commodity Exchange of India (MCX) bags the numero uno position. The country’s fund houses held ₹5600 crore worth of shares in the commodity exchange at the end of January, show data sourced from primemfdatabase.com. Other small caps with similar exposure from the fund houses include Blue Star, Kalpataru Projects International, Brigade Enterprises, and Cholamandalam Financial Holdings.

While shares of MCX have more than doubled over the last six months, the stock of Blue Star, Kalpataru Projects International, and Brigade Enterprises have returned anywhere between 46% to 72% during the same period. In comparison, the benchmark Nifty50 has gained 14% over the last six months.

In fact, the gauge of small stocks –Nifty SmallCap – has outdone other indices with a handsome gain of 33% over the last six months. That compares with the 25% returns yielded by Nifty Midcap during the same period.

Small-cap stocks are those that command a market capitalisation of less than ₹5,000 crore, while mid-cap stocks are defined as those with market values of between ₹5,000 crore and ₹20,000 crore. These two categories are generally less liquid compared to their large-cap peers. On average, promoters own 55% of the Nifty Small cap index against 40% in the broader market.

The mutual fund industry recorded a net equity inflow of ₹21,780.56 crore in January, the highest since March 2022.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Up 135% in six months! UBS sees more upside in this multibagger stock; here’s why

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Multi Commodity Exchange of India Ltd. (MCX), which have rallied 135% in the last six months, gained another 2% in Monday’s trade after global broking firm UBS said the rally is not over yet.

UBS has maintained a ‘Buy’ rating on the MCX stock and also revised its target price to ₹4,300 from ₹3,000 per share earlier, citing strong growth to flow into profitability in the current quarter. The revised target implies a potential upside of nearly 10% from Friday’s closing levels.

The brokerage said that MCX’s new product launches will be a key driver for near to medium-term growth.

Volatility will support both volume and realisation for options, UBS said in its latest note to clients. The brokerage also expects compounded earnings of 20% in FY24 to FY26, which is adjusted for one-offs in FY24.

MCX shares are trading at 40 times higher one-year forward price-to-earnings, which it believes is justified on strong growth outlook.

The stock was trading 0.84% higher at ₹3,615 apiece on NSE today. The multibagger stock has gained 14% so far this year and is up over 160% in the last one year.

The Multi Commodity Exchange of India is an exchange and data platform on which commodities such as gold and silver are traded.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

MCX trading session begins at 1 pm, says delayed due to slow process & generation of backend files

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Multi Commodity Exchange (MCX) trading session on Tuesday, February 13, began at 1pm, after it faced some technical issues.

MCX said the delayed start was because of the slow process and generation of backend files.

Earlier in the day, the MCX had confirmed it was facing technical issues on its trading platform and that it was, along with technology vendor TCS, working to resolve the issue. At first, it had said the trading would begin at 10 am, which was later delayed to 11 am and then finally 1 pm.

On another note, the MCX recorded a net loss of ₹5.35 crore compared to a profit of ₹38.79 crore in corresponding period of last fiscal. This is despite a strong topline growth as revenue from operations rose 33.4% on-year to ₹191.5 crore for the quarter.

MCX went live with the new Commodity Derivatives Platform with effect from October 16, 2023.

.MCX shares were trading 0.76% lower at ₹3,462.35 at 1.15 pm on February 13.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

MCX says will not renew any old contracts after moving to new platform

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Multi Commodity Exchange of India (MCX) will not renew any old contracts following its transition to a new web-based commodity derivatives platform, Rishi Nathany, Head of Business Development and Marketing at MCX, told CNBC-TV18.

Nathany said the software has been an enabler easing transactions further leading to a volume boost.

“If you see FY23-24, the overall volume till date has been in futures 20,354 crore and options at 81,220 crore. But if you see the post go-live volumes, they have been higher than this. So you have seen 20,094 crore in futures and 87,842 crore in options. So, overall there has been a growth in turnover, pre and post go-live,” he said.

He said a few isolated issues faced during the transition have been promptly addressed, and efforts are ongoing to resolve any outstanding concerns.

MCX successfully migrated to the Deutsche Börse’s T7 platform in collaboration with Tata Consultancy Services (TCS) for backend support from banks.

The MCX officially went live with the new Commodity Derivatives Platform on October 16, 2023. The initial implementation date, set for October 3, was temporarily postponed by the capital market regulator, Securities and Exchange Board of India (SEBI), due to technical issues and pending legal matters.

Also Read | CNBC-TV18 Newsbreak Confirmed: MCX to go live on new tech platform today

The migration to the TCS-developed platform, initiated under a 2021 agreement, is a substantial move for MCX. The exchange had been operating on a platform provided by 63 Moons Technologies, with a contractual arrangement in place until the end of December.

Also Read | CNBC-TV18 Newsbreak Confirmed | MCX gets approval from SEBI tech panel to shift to new platform

To ensure a smooth transition and minimize disruptions to trading operations, MCX had strategically planned to commence the migration process three months before the expiration of the agreement with 63 Moons. This approach allowed MCX to operate on both platforms simultaneously during the transitional period, gradually shifting entirely to the TCS platform ahead of the contract expiry with 63 Moons in December.

Also Read | MCX set for a major cost saving in TCS deal, annual fee may be less than ₹10 crore: sources

For more details, watch the accompanying video

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

MCX invites applications for post of MD & CEO — all details here

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Leading commodity bourse Multi Commodity Exchange of India on Monday (November 27) has invited applications from qualified candidates for the position of managing director and chief executive officer.

The vacancy will take effect from May 10, 2024, which is when the current incumbent’s tenure will end. Aspiring candidates should possess a solid educational background, including qualifications such as CA/MBA/LLB/B Tech or equivalent from renowned institutions.

The ideal candidate will have to be a seasoned professional with over 20 years of experience in commodities, securities, and capital markets, coupled with financial and general management expertise. Further, a comprehensive understanding of technology and operations in the financial services sector is deemed essential.

The applicant should have a minimum of five years experience in a senior leadership position, preferably within exchanges or the financial sector.

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A proven track record and a forward-thinking vision to elevate MCX to new heights are key criteria. Effective communication and networking skills, along with the ability to manage external relationships and stakeholders, are highly valued.

Applicants should be under 60 years of age as of the date of the vacancy announcement, and the eligibility criteria under the Companies Act and SEBI Regulations must be met. The exchange may consider relaxation in qualifying the criteria in deserving cases based on merit.

The selected MD and CEO will be entrusted with overseeing the affairs of the exchange under the guidance of the board of directors.

The remuneration will be commensurate with the candidate’s qualifications and experience, aligning with industry standards. However, all aspects of the appointment, including terms, conditions, and remuneration, are subject to SEBI approval.

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The tenure of the appointment is up to five years, with the possibility of renewal based on performance reviews and SEBI’s endorsement.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

MCX set for a major cost saving in TCS deal, annual fee may be less than ₹10 crore: sources

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In the conference call after its quarterly earnings, Multi Commodity Exchange of India (MCX) announced that it will not have to make payment to Tata Consultancy Services (TCS) for the software maintenance in the first year of its use.

As per the agreement, the initial year of platform utilisation is categorised under a warranty period, absolving MCX of any software maintenance payments to TCS during this phase.

As the initial excitement settles, attention turns to a question looming on investors’ minds: What happens once the one-year warranty period concludes in September 2024?

Sources hint at a paradigm shift, with post-warranty software maintenance fees projected to be in the single digits, a figure notably less than ₹10 crore.

This anticipated reduction is in stark contrast to MCX’s previous financial commitments, where it was paying a substantive ₹125 crore per quarter to 63 Moons for software usage, a contract set to expire in December of this year.

In its reply to CNBC-TV18’s query concerning the software costs, MCX has said it would not like to make any comment at this point.

The market has responded emphatically to MCX’s tech leap, with the stock reaching a record high of ₹2,666 per share on November 8.

Since the transition to the TCS platform on October 16, the stock has surged more than 21%, drawing positive sentiment from brokerages.

UBS, in a recent note, has raised the target for MCX to ₹3,000 per share, citing stabilisation of the new technology platform and promising near-term drivers. The stock has delivered returns of over 63% in 2023, reflecting the market’s resounding confidence in MCX’s strategic direction.

On the earnings front, MCX reported Q2 earnings below estimates, with a reported loss of ₹19 crore compared to a profit of ₹63 crore in the same quarter last year. The loss can be attributed to a sharp surge in software support charges, revealing a shift in financial dynamics.

In Q2 FY24, software charges disclosed by the company stood at ₹134.50 crore in Q2FY24 against ₹21.85 crore in Q2FY23 and ₹89 crore in Q1FY23.

On an operating level, it reported an EBITDA loss of Rs 9 crore against an EBITDA of ₹84 crore year-on-year.

Despite this, brokerages remain positive, attributing the loss to transitional adjustments and foreseeing a positive trajectory driven by the newfound cost efficiency.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

MCX shares may rise 30% in the next 12 months after UBS cites near-term growth drivers in place

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of exchange platform MCX Ltd. may rise as much as 29% over the next 12 months, according to brokerage firm UBS, as it has its near-term growth drivers in place.

The brokerage maintained its “buy” recommendation on the stock and raised its price target to ₹3,000 from the earlier target of ₹2,100. The revised target implies a potential upside of 29% from Tuesday’s closing levels.

UBS stated that the MCX’s new technology platform is stabilising and that newer products will drive the near-to-medium-term growth for the company.

MCX launched its new web-based commodity derivatives platform (CPD) last month after several delays. This launch came after Sebi’s Technical Advisory Panel gave its go-ahead to MCX’s proposal to shift to a new trading platform.

Earlier, the markets regulator had asked to put on hold the proposed go-live of its new commodity derivatives platform planned for the first week of October.

The brokerage house also said that competition concerns for MCX are overdone now.

It has raised its financial year 2025 and 2026 estimates for MCX by 15% and 16% respectively to factor in strong options ADV (Average Daily Value) trend, new product contributions and higher operating leverage from the newer platform.

MCX shares are trading at 31 times one-year forward price-to-earnings, adjusted for the one-off costs. The stock has risen 50% over the last six months.

Shares of MCX are trading at the day’s high, currently trading 1.9% higher at ₹2,375.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

CNBC-TV18 Newsbreak Confirmed: MCX to go live on new tech platform today

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Multi Commodity Exchange (MCX) on Tuesday (October 10) said it will go live with the new Commodity Derivatives Platform with effect from Monday, October 16, 2023.

The commodity exchange has said that the trading will now start on October 16 from 10:45 am instead of 9:00 am. The trading will shift on the new trading software, and the time will be applicable only for trading on Monday, October 16.

Also, the exchange has planned to conduct mock trading on October 15, 2023, in order to allow members to participate, and validate setup and connection, for which a separate circular would be issued.

MCX announced last month that it will go live with the new platform developed by TCS on October 3, the implementation was put on hold soon after by the capital market regulator Sebi due to “technical issues” and in the wake of some pending legal matters.

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While the exchange has been holding mock trading sessions for the new software for quite a long time and will continue on October 10-12, it said Sebi has withdrawn its directions to “keep the proposed Go-Live of CDP (Commodity Trading Platform) in abeyance”.

The exchange said Sebi’s decision followed replies submitted by it and its clearing corporation to the regulator on the complaint of Chennai Financial Markets and Accountability (CFMA).

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow