The currency bourse, United Stock Exchange (USE), has hired brokerage firm Geojit’s Saudi Arabian operations head, K Kumar, as its deputy chief executive officer. USE has had a problem since its CEO, T S Narayanaswami, left the exchange within a year of launching operations and volumes fell to a few hundred crores.
Kumar is a old hand in the exchange sector. He was among the key officials from IDBI Bank at the time of the setting up the National Stock Exchange (NSE), currently a market leader in equity trading. After working for a few years at NSE, Kumar was deputed to head the Over the Counter Exchange of India, from where he joined as the Indian head of UK-based Cazenove Securities and then to Geojit.
USE was launched on September 20, 2010, with an opening-day volume of 9.88 million contracts, a world record for first-day trading at any new exchange. However, the exit of key officials dealt a body blow to business. Narayanaswami's exit was followed by that of Saurav Arora, designated as president in-charge of business development & marketing. Arora is the son of Gaurav Arora, owner of Jaypee Capital, a founder-promoter and one-time large volume generator at USE.
Both Narayanaswami, the former chief of Bank of India, and Arora were instrumental in bringing volumes.
For Kumar, the key challenge will be to lobby with banks. Apart from a few Delhi and Kolkata-based brokers, domestic banks are the largest volume generators on the currency exchanges. In the past couple of weeks, after the Reserve Bank put restrictions on banks for trading in currency, the volumes on other currency exchanges like NSE and MCX-SX fell 50 per cent. The daily trading volume on each of these has come down to around Rs 5,000-6,000 crore. Also, domestic banks together are the largest shareholders of all the three currency exchanges.
Market analysts say the volumes on currency exchanges would stay low, as RBI is not expected to relax the rules for banks to trade in currency derivatives for a few months till the rupee recovers from its historic low levels.
When asked, Kumar did not want to comment but sources in USE said he would join in the next couple of weeks.
