Exchange declares quarterly results for first time.
The Bombay Stock Exchange (BSE), the country’s oldest stock exchange, declared its quarterly results for the first time.
The exchange has posted a marginal decline in its profit after tax (PAT) at Rs 57.27 crore in the quarter ended June 2009, compared with Rs 57.97 crore in the corresponding quarter last year.
While comparable figures of the National Stock Exchange (NSE) are not available, NSE’s PAT in 2007-08 (the latest figures available on its website) was almost three times that of BSE’s Rs 179 crore.
In 2008-09, BSE’s PAT went up by 18 per cent to Rs 212.18 crore. Analysts have valued NSE at $2.5 billion and BSE at $0.8 billion based on the most recent divestments. The other equity exchange, MCX-SX, has been valued at $1 billion, based on its sale of stake to IFCI.
Commenting on the decision to declare its results, BSE’s new Managing Director and CEO Madhu Kannan said, “As a part of good corporate governance practice, BSE has taken the step to announce its quarterly results periodically.”
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Sources familiar with the development said BSE had applied to the market regulator, the Securities and Exchange Board of India (Sebi), for launching an initial public offer. However, Sebi is yet to approve the proposal and is exploring self-listing guidelines.
The exchange’s total income during the period stood at Rs 115.72 crore as against Rs 110.89 crore in the corresponding period of the previous year, up 4.36 per cent. The average daily turnover during the April-June quarter rose 9.42 per cent to Rs 6,298 crore from Rs 5,756 crore in the corresponding quarter last year.
While income from investments and deposits grew 15.52 per cent to Rs 60.75 crore from Rs 52.59 crore last year, the exchange witnessed a decline in its income on the front of trading members at Rs 37.59 crore, services to corporates (Rs 8.15 crore) and training institutes (Rs 1.19 crore) — a fall of 4.59 per cent, 4.57 per cent and 49.58 per cent, respectively.
“Although income from transaction charges has gone up based on the increase in average daily turnover, the drop in PAT is mainly due to higher tax provision. The income for Q1 FY10 consists of income which is chargeable to full rate of tax as compared to higher exempt income in the corresponding quarter of the previous year,” added Kannan. Tax expenses increased from Rs 11.46 crore to Rs 21 crore in this quarter.
The exchange cut its expenditure on advertising and market development by 94.26 per cent in the June quarter to Rs 0.26 crore as against Rs 4.53 crore last year. However, it increased its expenses on computer technology by 6.54 per cent to Rs 11.07 crore.