With inception of Multi Commodity Exchange of India (MCX), Jignesh Shah has brought a remarkable change in commodities exchange market. Currently exchange of currency futures along with competes implicates the trade portfolio of MCX – SX in association with National Stock Exchange and Bombay Stock Exchange. Shah’s significant impact was reckoned when Financial Technologies, provider of financial software was co- founded by him for trading terminals. The same is currently giving 80% operating solutions to India’s financial institutions, brokerage firms and banks.
The country’s latest stock exchange reveals following specifications:
- In contrast with 1,665 firms on NSE and 5,191 companies on BSE, MCX – SX has drawn a grand opening with 1,116 listed companies.
- SX-40 is the benchmark index used by MCX that holds parallel value in terms of BSE Sensex and the NSE Nifty. The design of SX – 40 is carried out in such a way that it reviews the economic performance and ICB based sectors for superior effigy of various industries.
- All the big names i.e. ACC, Ambuja Cements, Asian Paints, Bajaj Auto, BPCL, Bharti Airtel, BHEL, Cairn India, Cipla, Coal India, Dr Reddy’s, Gail (India), HCL Tech, HDFC Bank, HDFC, Hero MotoCorp, Hindalco, HUL, ICICI Bank, Infosys, ITC, JP Associates, JSPL, L&T, Lupin, M&M, Maruti Suzuki, NTPC, ONGC, Power Grid Corp, RIL, Sun Pharma, TCS, Tata Motors, Tata Power, Tata Steel, Titan Industries, United Spirits, Wipro, and Zee Entertainment, forms the part of SX-40.
- While Britain FTSE has free float range of 25 per cent together with 50 per cent of US S&P, the SX-40 alone holds a free float based index of 40 large-cap and liquid stocks. Thus receives those companies that form the top 100 liquid ones as they overtures the minimum free float of 10 per cent.
- Though the weight of largest constituent on Nifty is 8.8 per cent and 10.3 per cent on Sensex yet SX- 40 stands at 9.4 per cent giving tough run to both. Concurrently, top 10 stocks have a different story as it records for a 62.4 per cent weightage on SX- 40 while Nifty and Sensex exhibits 57.4 per cent and 67.8 per cent respectively.
- The sensational returns of 16.3 per cent from 2010 to Jan 2013 were noted in case of SX- 40 contrary to 15 per cent on the Nifty and 13.5 per cent on the Sensex. Perhaps, the base date for SX- 40 is March 31, 2010 hitherto base value is 10,000.
- So far Nifty has no industrial cap in its composition and SX- 40 exposes 20 per cent i.e. +/- 2 per cent band. This implies the restriction on a particular industry that cannot have over 20 per cent weightage in the index.
- If weightage has to be detailed out then, Financials (22 per cent), consumer goods (18.2 per cent), industrials and oil & gas (both 14.8 per cent), tech (14.2 per cent), healthcare (5.1 per cent), basic materials (4.7 per cent), utilities (3.1 per cent), telecom (2.4 per cent) and consumer services (0.7 per cent), is the best description.
- To acquire a noteworthy market share amongst the titans of industry (NSE and BSE), MCX- SX endeavored a 50 per cent discount on transaction charges to new joiners. It enabled pooling of profound number of proprietary derivative traders as can be reviewed from 700 membership applications. Out of which MCX- SX have made 405 applications already registered with market regulator SEBI.
- In forthcoming years MCX – SX plans out to capitalize on government’s initiatives in regard of encouraging mutual funds and insurance investments to advance more retail investors into stock markets. As volume transfers plays a key role in Stock Exchanges, the value of shares traded remains a fraction of global exchanges in the country.