Sebi wants BSE to ramp up services

Chairman of the Securities and Exchange Board of India (Sebi) M Damodaran has asked the Bombay Stock Exchange (BSE) to introduce more products, cut costs and look at new ways to increase business so that it could catch up with the rival National Stock Exchange, which has run away with market share in stock market volumes.

Speaking on the occasion of BSE's 133rd foundation day, without naming the NSE, Damodaran said the new stock exchange has run away with market share, and asked the BSE to address the challenges with its new shareholders, who have seen an opportunity by investing in the exchange recently.

He was referring to the stake sale of 26 per cent in the BSE to a clutch of strategic and financial investors. Germany's Deutsche Boerse and Singapores SGX took 5 per cent stake each in the BSE recently while another 16 per cent was sold to other foreign private equity players.

NSE, founded with governments backing in the early 1990s, has more than 90 per cent of trading volumes in India, while the BSE, Asia's oldest stock exchange, is now trying to catch up with its young rival. NSE also has a near- monopoly status in derivatives segment, where daily volumes clock in excess of Rs 35,000 crore.

He also asked BSE officials not to be carried away by the rise in the Sensex and other sectoral indices of the BSE.

"Leave the numbers to tell their own stories. Numbers do tell stories. But that is not the whole story," he said, addressing leading figures from the Indian financial world.

The Sebi chief said: "The BSE would not be able to match NSE unless you are the master of your destiny, unless you set the agenda for change."