| EXCHANGE VENTURES |
| The Financial Technologies Group
is a creator and operator of exchanges in the fastest
growing economies from Africa to Asia. These exchanges
have facilitated better price discovery, risk management
and structured finance. In FY 08-09, the group expanded
operations to include new asset classes, new markets
and new regions such as Africa and Singapore. This
year saw the dawn of four new exchanges—one
in India and three overseas—MCX Stock Exchange
in India and Singapore Mercantile Exchange, Bourse
Africa (Botswana) and Bahrain Financial Exchange,
overseas. The following are some of the key developments
in each of the Group’s exchanges: |
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| MULTI
COMMODITY EXCHANGE OF INDIA
LTD. (MCX) |
Multi
Commodity Exchange of India
Ltd. (MCX), promoted by FTIL,
is India’s No. 1 commodity
exchange, which is demutualised
and has over 87% market share.
MCX is certified to ISO 9001:2000
and ISO / IEC 27001:2005 (information
Security Management System
standard). Moreover, in April
2009, it was certified to
ISO 14001:2006 (Environment
Management System standard).
Globally, MCX is the 7th largest
commodity futures exchange
in terms of volumes, despite
participation being restricted
to domestic players. Furthermore,
MCX ranks first in silver,
second in gold, third in crude
oil, zinc and copper futures.
In 2008, Futures Industry
Association (FIA) ranked MCX
as the fourth-largest commodity
exchange in Asia in terms
of number of contracts traded.
As on 31st March 2009, FTIL
had a 31.18% stake in MCX.
Since its inception, MCX has
been well placed to tap the
enormous potential of the
commodities market. It currently
has 53 commodities trading
across segments including
bullion, base metals, energy
and agri-commodities. The
Exchange has carved a prominent
place for itself with continuous
innovation and development.
In FY 08-09, MCX recorded
an average daily turnover
of Rs 148,964 million, an
increase of 45% as compared
to FY 07-08. As on 31st March
2009, the Exchange had a wide
membership base of 2,046 members.
It recorded the highest-ever
single-day turnover of Rs
320,163 million on 19th March
2009. During the year under
review, MCX launched futures
trading in “electricity”
for the first time in India,
along with other commodities
such as areca nut and heating
oil, and revised the transaction
fee levied for commodities
trading on the MCX platform. |
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| MCX
STOCK EXCHANGE LTD. |
Recognised
by SEBI and RBI, MCX Stock
Exchange Ltd. (MCX-SX) has
been allowed to facilitate
trade in exchange-traded currency
derivatives. As on 31st March
2009, FTIL held a 49% stake
in MCX-SX.
More and more large corporates
and banks are using currency
futures to manage risk against
currency price fluctuation
or to take advantage of an
anticipated market direction.
The Exchange is increasingly
being used by corporates and
banks to hedge the risk associated
with fluctuations in currency
values. Within five months
of operations since inception,
MCX-SX has garnered a market
share of around 50%.
Introduction of new products
such as exchange rate derivatives,
currency and cross currency
pairs, and simple credit market
derivatives, post the respective
regulatory approvals, is expected
to drive volumes on the Exchange.
MCX-SX recorded an average
daily volume of 261,820 contracts,
valued at Rs 13,055 million
and open interest of 194,170
contracts, as on 31st March
2009. The Exchange recorded
the highest daily volume of
775,953 contracts valued at
Rs 39,120 million on 20th
March 2009. The Exchange’s
total forex turnover increased
from US$ 60 million to US$
1 billion within five months
of operations since inception. |
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| NATIONAL
SPOT EXCHANGE LTD. (NSEL)
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National
Spot Exchange Ltd. (NSEL)
is India’s first nationwide
spot exchange for commodities.
FTIL set up NSEL in partnership
with National Agricultural
Cooperative Marketing Federation
of India Ltd. (NAFED), a leading
government agency engaged
in food procurement, distribution,
and storage activities. NSEL
services the Rs 17,500 billion
physical trade market (spot
market) for agri-commodities,
and provides opportunities
to physical trade participants
as well as investors. As on
31st March 2009, FTIL had
a 99.99% stake in NSEL.
NSEL commenced operations
on 15th October 2008. Currently,
NSEL offers spot trading in
commodities in gold, silver,
and agri–commodities
such as castor seed, cotton,
areca nut, guar seed, chana,
among others. It has started
trading operations in eight
states namely Gujarat, Maharashtra,
Rajasthan, Karnataka, Madhya
Pradesh, West Bengal, Kerala
and Bihar.
NSEL recorded a total turnover
of Rs 15,990 million, as on
31st March 2009. The Exchange
also recorded an increase
in the average daily turnover
from Rs 8 million in October
2008 to Rs 261 million in
March 2009. |
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| INDIAN
ENERGY EXCHANGE LTD. (IEX) |
Indian
Energy Exchange Ltd. (IEX)
is Asia’s first-ever
power exchange for spot trading
in electricity. The IEX is
an automated and demutualised
bourse with nationwide operations
within the regulatory parameters
of the Central Electricity
Regulatory Commission (CERC).
The Exchange facilitates equitable,
transparent and efficient
trading of power, and bridges
the demand-supply mismatch
by bringing larger players
together to buy and sell in
an auction-based system, thus
providing liquidity to the
power markets. As on 31st
March 2009, FTIL had 41.22%
stake in IEX.
IEX, India’s first power
exchange, commenced operations
on 27th June 2008. The first
year of operations has been
constructive for IEX. It has
strengthened its foothold
in the nascent power market
and has built relationships
with market participants.
The Exchange has maintained
its strong hold over the market,
with 92% market share as on
31st March 2009. The objective
of the Exchange is to organise,
operate and develop a market
place for spot power trade
in India.
IEX recorded a total turnover
of Rs 19.51 billion and highest
daily traded volume of 20,451
MWh, as on 31st March 2009.
The increase in volumes can
be attributed to the greater
market awareness. The Exchange
is in the process of introducing
new contracts such as week
ahead and month ahead contracts,
post regulatory approval from
CERC. It will further improve
market efficiency and promote
integration of regional markets.
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| DUBAI
GOLD AND COMMODITY EXCHANGE |
Dubai
Gold and Commodity Exchange
(DGCX), the first derivatives
and commodities exchange in
the Middle East, operates
in a free trade zone with
a 50-year tax holiday for
the Exchange and its members.
It offers huge advantages
to existing participants in
the physical commodities markets
in the region. These include
an effective regulatory structure,
futures and options trading
for a range of commodities,
robust risk management and
surveillance systems, and
settlement guarantees provided
by the Dubai Commodities Clearing
Corporation (DCCC). DGCX is
a joint venture between Financial
Technologies (39%), MCX (5%),
other international investors
(5%) and the Dubai Multi Commodities
Centre (DMCC) (51%). The year
2008-09 saw MCX divesting
3% of its holding in DGCX
to international investors.
DGCX is a technology driven
demutualised exchange that
provides a trading platform
for a wide array of commodities
and currencies. It offers
a fully automated, state-of-the-art
infrastructure accessible
from anywhere in the world,
thus widening opportunities
for the growing investment
community of the region. During
the year the Exchange launched
Brent crude oil and WTI crude
oil futures contracts.
Since inception, more than
2.8 million contracts valued
at over US$ 119 billion have
been traded on DGCX, The Exchange
recorded an average daily
volume of 4,084 contracts
worth US$ 224 million, as
on 31st March 2009. |
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| IBS
FOREX LTD. |
| IBS
Forex provides a digital trading
platform for inter-bank forex
transactions and has introduced
the concept of ‘value
for money’ pricing.
It primarily caters to spot
and forward trading in USD-INR
for inter-bank forex market
in India by providing an electronic
order-matching platform IBS
Forex has recorded a cumulative
turnover of about US$ 60 billion
till March 2009. About 25
leading banks—public
and private sector banks—use
the IBS Forex platform. As
on 31st March 2009, FTIL had
a 76% stake in IBS Forex. |
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| SINGAPORE
MERCANTILE EXCHANGE PTE. LTD.
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| Singapore
Mercantile Exchange Pte. Ltd.
(SMX), an international commodity
derivatives exchange situated
in Singapore, will offer a
state-of-the-art electronic
trading platform to trade
in a diversified basket of
commodities including futures
and options contracts on precious
metals, base metals, agriculture
commodities, currencies and
commodity indices. The Exchange
caters to the Asian time zone
between Tokyo and London and
provides central counter party
for all trades executed on
it through wholly owned clearing
corporation, SMXCC. SMX is
at an advanced stage of obtaining
the necessary regulatory approvals
from the Monetary Authority
of Singapore (MAS). As on
31st March 2009, FTIL had
100% stake in SMX. |
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| GLOBAL
BOARD OF TRADE LTD. |
| Global
Board of Trade Ltd. (GBOT),
licensed by the Financial
Services Commission of Mauritius,
will be the first pan-African,
derivatives exchange and a
gateway to serve the African
continent. GBOT will be an
electronic trading platform,
with its central matching
engine connected by VSAT /
internet to its members’
terminals in their respective
offices anywhere in the world.
GBOT received its clearing
house license from the Financial
Services Commission. The Exchange
has also drafted the rules
and is ready with the contract
specifications for commodities
on the futures and options
(F&O) platform and has
initiated a membership drive.
As on 31st March 2009, FTIL
had 100% stake in GBOT. |
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| BAHRAIN
FINANCIAL EXCHANGE LTD. |
| Bahrain
Financial Exchange Ltd. (BFX)
aims to provide Middle East
with the most sophisticated,
transparent and liquid exchange,
offering access to a diverse
range of multi-asset products
within a unique customer-centric
environment. BFX will be an
efficient platform for regional
and international businesses
to raise capital by issuing
and listing various types
of financial instruments on
its markets. Through a multi-access
trading model, the Exchange
will offer multi-asset class
trading of conventional products
while also pioneering Sharia-compliant
products within the regulatory
framework of the Central Bank
of Bahrain (CBB). |
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| BOURSE
AFRICA LTD. |
| Bourse
Africa is the first pan-African
spot and derivatives multi-asset
exchange to offer trading
in commodities and currencies,
under the regulatory framework
of the Non-Bank Financial
Institutions Regulatory Authority
(NBFIRA). The Exchange will
have a pan-Africa presence
with the hub located in Botswana
and spoke subsidiaries across
Africa. Bourse Africa is accredited
to the Botswana International
Financial Services Centre
(IFSC). |
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