Mumbai, Feb. 10: The country’s third national-level stock exchange MCX-SX will start trading in both equity cash and derivative segments from Monday.
MCX-SX will initially list around 1,116 companies under the “permitted to trade” category. The flagship index of MCX-SX — SX40 — will compete with the BSE Sensex and the NSE Nifty. It will be a free-float based index of 40 large-cap and liquid stocks, representing diverse sectors.
The base value of the SX-40 will be 10,000, with the base date being March 31, 2010. Companies such as Reliance Industries, HDFC Bank, TCS, Infosys and ICICI Bank are part of the index.
The arrival of the new bourse comes at a time foreign institutional investors continue to show interest in domestic equities even as retail participation remains muted.
According to market experts, the success of MCX-SX, which will compete with well-entrenched players such as the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), will depend not only on the introduction of better products but also on whether it results in lower trading costs for the investor.
“There is an expectation that the new exchange will increase competition and help in driving costs lower whether it be for a investor or company which would list on the exchange. Better discovery of cost is a key aspect that various stakeholders are looking forward to. As the trading cost for brokers comes down, it will percolate in the form of lower brokerage fees to investors,’’ said Arun Kejriwal, director, KRIS.
At a news conference on Saturday, Jignesh Shah, vice-chairman of MCX-SX, said the new exchange would look to bring down trading costs, though this would not happen immediately, as much would depend on the liquidity.
In the run-up to its launch, MCX-SX did take some aggressive steps to lure brokers into its fold. As an introductory offer last year, it had announced lower deposits and net worth requirement compared with the NSE.