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Dalal Street comes calling to Calcutta

Mumbai, Sept. 19: It’s Calcutta calling for Bombay Stock Exchange (BSE), the country’s oldest equity market.

A regional hub set up by the 126-year-old bourse was opened for business today as its first footprint in the City of Joy. It will provide member-brokers and sub-brokers low-cost connectivity to BSE systems in Mumbai and will help the bourse reach out to more intermediaries and investors in Calcutta and its hinterland.

“We will offer extremely competitive rates and our transaction fees would be lower than our competitors,” BSE chief and executive director Manoj Vaish said.

The move is part of the bourse’s attempts to create its own niche at a juncture when National Stock Exchange, the country’s largest bourse, is the turnover titan.

NSE’s turnover is two to three times that of BSE’s. This has happened primarily because of its higher volumes, made possible through its presence in key cities and towns.

While NSE has been growing at a scorching pace, regional bourses, especially Delhi Stock Exchange and the Calcutta Stock Exchange, have seen business dry up. One of the reasons for that has been a spate of de-listings.

Many brokers say the regional hubs in Calcutta and the one set up in Delhi earlier would help BSE, which has launched measures to regain its pre-eminence, benefit in terms of a greater volume of business.

Calcutta, Vaish said, accounts for 10-15 per cent of the total traded volumes in the country. Delhi and Calcutta together match volumes recorded in Mumbai. This is an indication of the business potential in the two cities.

“It will enable BSE to strengthen its distribution in Calcutta and reach out to more intermediaries and investors,” Vaish said. The local hubs will allow brokers to connect to centres in other cities that are wired up to the parent’s node in Mumbai.

Brokers affiliated to BSE and based in the two cities had to connect to the exchange either through a leased line or a V-sat. “With margins and volumes plunging, brokers can ill-afford these luxuries,” market watchers said. “The cost of hooking up will be in lakhs. It is simply unaffordable in the current bearish phase,” they added.

For BSE, the hubs in the two cities give it an opportunity to enlarge its domain in areas other than Mumbai — which gives NSE its highest quantum of business.

Events at the Delhi and Calcutta exchange have not inspired the investor confidence needed to keep them going. While the former has seen several sessions without a single transaction, the latter has been pulled up by the Securities and Exchange Board of India for mismanagement. BSE hubs would offer an alternative there.

That Sebi executive director inaugurated BSE’s regional hub could make many on Lyons Range cringe.

The hub will provide fault-tolerant, economical, and high-speed connectivity to the BSE On-line Trading (BOLT) system and Derivatives Trading and Settlement System (DTSS) of the Exchange, the bourse said.

Member-brokers can connect multiple terminals on a single local lease line connectivity to the hub. With this initiative BSE has come closer to market participants in Calcutta, Bandiram Prasad, chief general manager — corporate communications said.

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