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Ray of hope for regional bourses

Calcutta, June 25: Some of the regional stock exchanges are understood to have evinced interest in obtaining membership of the Multi Commodity Exchange of India Ltd — the online bourse for commodity futures on which trading will commence in September.

The Multi Commodity Exchange — better known by its acronym MCX — was promoted by Financial Technologies (India) Ltd, an IT firm. MCX officials said Financial Technologies was looking to reduce their stake in the bourse, which has an equity capital of Rs 20 crore.

“The bourse is, at present, wholly owned by Financial Technologies. The promoters want to broaden the shareholder base of the bourse, and hence have invited banks, associates and key commodity players to invest in MCX,” said Joseph Massey, deputy managing director of the bourse.

Some of the regional bourses have been thinking of introducing trading in commodities to revive themselves. Massey said MCX was speaking to a wide range of people, including large corporations and exchanges, but refused to divulge details. “There’ll be liquidity in the market if we have 250 members to start with,” he added.

Trading on MCX will start with six commodities: gold, castorseed, rubber, silver, cotton and pepper. Going forward, trading in various other commodities and metals could be introduced. The commodity futures market is regulated by the Forward Market Commission, and MCX has already obtained approval for its products.

The MCX management, which is holding roadshows across the country, expects the commodity futures market to grow exponentially over the next 3-5 years. “Trading in commodity futures could go up to 10 times the value of the annual produce, which at present is Rs 350,000 crore,” said Massey, who has headed two stock exchanges in the past.

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