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BSE comes closer to Calcutta, Delhi

Mumbai, May 3: The Bombay Stock Exchange (BSE), the 125-year old premier bourse in the country, will finally shed its regional image when it extends its reach to Delhi and Calcutta by setting up regional hubs in the two cities.

One of the few surviving regional bourses in the country, the BSE will set up hubs in Calcutta and New Delhi in an attempt to attract business from the two cities.

At present, the National Stock Exchange holds complete sway in these cities with offices and hubs here. The regional exchanges — Delhi and Calcutta — are barely surviving in a market that has seen much consolidation as trading volumes have plunged across the bourses.

“BSE will set up hubs in Delhi and Calcutta soon. These will provide brokers in these regions an extremely low-cost connectivity to BSE,” Manoj Vaish, executive director and chief executive officer of BSE, told The Telegraph.

“It will enable BSE to strengthen its distribution in these regions and reach out to more intermediaries and investors,” Vaish added.

The hubs will help brokers to connect locally to hubs in cities that have onward connections to the parent hub in Mumbai. Until now, brokers affiliated to BSE who were based in the two cities had to connect to BSE either through a leased line or a V-sat.

“With margins and volumes plunging sharply, brokers cannot afford these luxuries,” market circles aver. “The charges would run in lakhs and during Mandi (bearish) times, this is simply unaffordable,” they explained.

For BSE this move means spreading its footprints to the two cities which provide the maximum turnover after Mumbai for National Stock Exchange. BSE is currently clocking an average turnover of less than Rs 1000 crore. At times, the traded turnover in the equity segment is as low as Rs 700 crore, a far cry from the average business volumes of Rs 3000 crore.

For NSE, Delhi and Ghaziabad constituted over 18.38 per cent of its total turnover in 2002-03, while Calcutta accounted for 12.03 per cent, up from 9.15 per cent.

While the Delhi Stock Exchange makes news when it records a transaction, CSE is struggling to survive after getting embroiled in the Ketan Parekh's stock Scam.

BSE hopes that by setting up hubs it will help its brokers having sub-brokers in the two cities to drastically minimise costs.

The Delhi hub will take off in the next few days while the Calcutta office might take a couple of months to start operations, a BSE official said.

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