Business | Markets

NYSE Euronext to buy stake in India's top commodity bourse

NYSE Euronext, the parent of New York Stock Exchange, has agreed to buy a five per cent holding in India's largest commodity bourse for $55 million, giving it a stake in a fast-growing market.

  • Reuters
  • Published: 23:43 February 15, 2008
  • Gulf News

Mumbai: NYSE Euronext, the parent of New York Stock Exchange, has agreed to buy a five per cent holding in India's largest commodity bourse for $55 million, giving it a stake in a fast-growing market.

Financial Technologies India, which controls the Multi Commodity Exchange (MCX), and NYSE Euronext said in a joint statement on Friday they expect to complete the deal in the first half of 2008.

"We believe that our investment in MCX will produce new business opportunities for NYSE Euronext in the commodities sector," Duncan Niederauer, chief executive at NYSE Euronext, said. Interest in India's vibrant exchanges is the latest in the wave of consolidation attempts among bourses around the world as the volume of trade soars and as operators seek global reach and greater economies of scale.

For NYSE Euronext this will be its second foray into India after buying a five per cent stake in the National Stock Exchange, India's biggest stocks bourse, for $115 million last year.

In January, the Indian government had allowed foreign companies, funds and exchanges to acquire up to 49 per cent of a commodity bourse, but with single holdings capped at five per cent.

Last year, Citigroup and Merrill Lynch had each bought five per cent in MCX. Goldman Sachs and IntercontinentalExchange hold stakes in rival National Commodity Derivatives Exchange.

India has three main commodity exchanges with a combined daily turnover of up to Rs200 billion ($5 billion) and a total annual figure of $900 billion. That is likely to touch $1 trillion in 2008.

Goldman also owns five per cent in the National Stock Exchange.

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