MCX still has a long way to go despite the multi-billion rupee achievements. A B&E exclusive interview....
B&E: What degree of importance has MCX SX attained so far?
JS: We started stock exchange in currency in the first week of September, 2008. Three months after the first stock exchange became operational in the country, trading volumes had increased by 65% on a month-to-month basis. In terms of share, we had gained around 50.5% of the total market by January 2009, with an average daily turnover at Rs.12.20 billion. While these figures may look impressive in a short journey of around 6 months, we have a long way to go, considering the huge potential for currency derivatives that exists in India. Most of the corporates, with exposure to currency risks are still operating though over-the-counter market, and are in the process, not only paying higher transaction costs, but also facing other challenges including high counter-party risks. Sometimes, they get lured by structured currency derivative products which they purchase without any knowledge of the underlying and without thorough understanding of the terms of conditions under which these products are offered. Our challenge lies in creating awareness among the stakeholders about benefits of participating through exchange-operated currency derivatives route. We are currently focussed on reaching out to SMEs, who have suffered most in the current global turmoil & related currency risks.
B&E: Innovative ideas and expansion have been the key areas for MCX over the years. How decisive are they for the success of MCX?
JS: Like our counterparts in the BFSI sector, it is innovative products and expanding tie-ups with benchmark markets that have led the MCX growth story. Our efforts to reach-out to market players with awareness about products and information about the market ecosystem through various other media sources played an equally important role in propelling MCX to the position it has attained today.
B&E: What degree of importance has MCX SX attained so far?
JS: We started stock exchange in currency in the first week of September, 2008. Three months after the first stock exchange became operational in the country, trading volumes had increased by 65% on a month-to-month basis. In terms of share, we had gained around 50.5% of the total market by January 2009, with an average daily turnover at Rs.12.20 billion. While these figures may look impressive in a short journey of around 6 months, we have a long way to go, considering the huge potential for currency derivatives that exists in India. Most of the corporates, with exposure to currency risks are still operating though over-the-counter market, and are in the process, not only paying higher transaction costs, but also facing other challenges including high counter-party risks. Sometimes, they get lured by structured currency derivative products which they purchase without any knowledge of the underlying and without thorough understanding of the terms of conditions under which these products are offered. Our challenge lies in creating awareness among the stakeholders about benefits of participating through exchange-operated currency derivatives route. We are currently focussed on reaching out to SMEs, who have suffered most in the current global turmoil & related currency risks.
B&E: Innovative ideas and expansion have been the key areas for MCX over the years. How decisive are they for the success of MCX?
JS: Like our counterparts in the BFSI sector, it is innovative products and expanding tie-ups with benchmark markets that have led the MCX growth story. Our efforts to reach-out to market players with awareness about products and information about the market ecosystem through various other media sources played an equally important role in propelling MCX to the position it has attained today.
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