NSE and NABARD invest in the equity of Multi Commodity Exchange

16 June 2005

In a significant development the country's largest stock exchange, the National Stock Exchange of India Ltd. (NSE), and the National Bank for Agriculture and Rural Development (NABARD), have announced their strategic participation in the equity of MCX.

This partnership of NSE and NABARD with MCX along with its existing share holders such as State Bank of India group (SBI along with its seven subsidiary banks and SBI Life), Union Bank, Corporation Bank, Canara Bank, Bank of Baroda, Bank of India, HDFC Bank and Financial Technologies (India) Ltd. Makes the MCX consortium the largest distribution network across the country.

According to Chitra Ramkrishna, deputy managing director, NSE ,"The commodities market worldwide are large markets attracting participation from a wide spectrum of the populace. The commodities markets in India are now being revolutionised by the use of technology and new techniques and we are confident that the commodities market shall grow leaps and bounds in the time to come. As the leading stock exchange in the country, NSE is happy to take a stake in the equity of MCX so as to leverage its experiences in the capital market and synergize with MCX for the growth of the commodities market."

MCX has three international tie-ups — Tokyo Commodity Exchange (TOCOM), the 250-year old Baltic Freight Exchange, London, Dubai Metals and Commodity Centre (DMCC) and the Dubai Gold and Commodity Exchange (DGCX), the strategic initiative of Government of Dubai. MCX has to set up the National Spot Exchange (NSEAP), which connects all India APMC markets thereby contributing in the implementation of Government of India's vision to create a common Indian market.

Adds Ranjana Kumar, chairperson, NABARD said, "In an increasingly liberalised economic environment, commodity futures market offers a market-based instrument to the farming community for managing risks and uncertainty. Development of futures markets provides powerful tool for efficient price discovery and risk mitigation and directly aids in strengthening the competitiveness of agriculture sector. In line with this and the priority accorded by the government of India, NABARD is keen to participate actively in fostering efficient spot as well as futures agriculture markets."