NYSE Euronext picks up 5 percent in MCX

July 2nd, 2008 - 4:31 pm ICT by IANS  

Mumbai, July 2 (IANS) The New York Stock Exchange Euronext (NYX) has acquired a five percent equity in India’s largest commodity derivatives exchange, the Multi-Commodity Exchange (MCX), through its affiliate Euronext NV, it announced late Tuesday night. NYX said a five percent equity investment is the maximum equity interest permitted by a single foreign investor in exchanges under Indian laws.

In the statement, Lawrence Leibowitz, NYSE Euronext Group executive vice president and head of US Execution and Global Technology, said through the investment in MCX, NYSE Euronext will be able to expand its global leadership “by aligning diverse business model with other global entities”.

Elaborating on this, he said Asia-Pacific region was a strong, growing region for global capital markets and MCX “is India’s number one commodity derivatives exchange”.

The statement quoted MCX chief executive officer and managing director Joseph Massey as saying the strategic investment by NYSE has to be viewed “as strategically important in the global context”.

MCX vice chairman Jignesh Shah said in the statement that the partnership would create “one of the largest global exchange networks across the fast growing economies of Africa, Central Asia, Middle East, India, China and other Asian countries”.

Shah is also the Chairman and chief executive officer of Financial Technologies Group (FTG), a co-promoter of MCX.

FTG has set-up seven exchanges for trading in derivatives and spot in commodities, metals, energy, soft and power among other asset classes even as it simultaneously explores opportunities to create new greenfield exchanges.

Currently, there are 14 corporate listings from India on NYSE Euronext markets, 12 on the New York Stock Exchange and two on Euronext (including one interlisted company), whose combined total global market capitalization is approximately $96.5 billion.

MCX and Liffe, NYSE Euronext’s derivatives business, entered a licensing agreement July 31 2006 for MCX to use Liffe futures prices, enabling the Indian entity to list domestic ‘mini’ futures contracts for Robusta coffee based on Liffe futures prices, the release said.

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