MCX rolls out the red carpet for local bourses

The Multi Commodity Exchange of India Ltd (MCX) will be concentrating more on consolidation with other regional commodity exchanges to make the most of the expected boom in trade in commodities.

MCX is explaining its strategy to all regional exchanges for possible partnerships and alliances as the future for modern commodity exchanges in India was getting brighter, Anjani Sinha, chief executive officer of MCX, said.

"MCX will be looking at major regional exchanges like Ahmedabad Commodity Exchange dealing with castor and Bombay Oilseed Exchange dealing in oil and oilseed derivatives," said Sinha.

MCX has already singed an alliance with Kanpur Commodity Exchange dealing in potatoes and other vegetables out of the 22 regional exchanges in the country.

MCX recently signed a memorandum of understanding (MoU) with India Pepper and Spices Trade Association based in Cochin as well.

MCX is likely to add some more commodities to its trading list which covers 50 products at present. "MCX is planning to launch a couple of more commodities like cloves and almond within May 2005," he added.

The volume of trade at MCX, now at Rs 1,500 crore per day, is expected to register an 100 per cent growth within next one year, he claimed.

The volume of trade in commodity exchange is likely to touch the equity exchange market in two years, added Sinha.

"The volume of trade at the commodities exchange is around Rs 3,500 crore per day, primarily dominated by MCX and National Commodities and Derivatives Exchange of India (NCDEX) as compared to Rs 20,000 crore per day mark of equity exchange market and is expected to surpass it within next two years," said Sinha.

Speaking on the proposed introduction of gold exchange traded funds (GET) by mutual funds (MF), Sinha noted that the government's view in this regard was still unclear as MF were not allowed to trade in commodities futures as of now.

"MFs can trade in physical gold but not gold futures and unless this is clarified it will be difficult to predict the future in this regard," added Sinha.