Diese Präsentation wurde erfolgreich gemeldet.
Wir verwenden Ihre LinkedIn Profilangaben und Informationen zu Ihren Aktivitäten, um Anzeigen zu personalisieren und Ihnen relevantere Inhalte anzuzeigen. Sie können Ihre Anzeigeneinstellungen jederzeit ändern.

MCX - what happened?

3.058 Aufrufe

Veröffentlicht am

What went wrong with MCX? A ppt by students of PGDM 2012-14/ Era Business School, New Delhi

Veröffentlicht in: Business, Wirtschaft & Finanzen
  • Als Erste(r) kommentieren

MCX - what happened?

  1. 1. Era Business School Era Business School Ajay K Raina; AJ1 Ajay K Raina; AJ1
  2. 2. Scope : Dateline • Part 1 – Power of a Dream. • Part 2 – Family Lineage. • Part 3 – The Axe Effect. • Part 4 – Bodyline Days. • Part 5 – Conclusion. Era Business School Ajay K Raina; AJ2
  3. 3. Era Business School Ajay K Raina; AJ3
  4. 4. An 8 Years Old Dreamer • A class Two student dreams of:– Becoming an Engineer; – Studying abroad; – Starting own business; – Marrying a class fellow….. • Jignesh Shah. • Deviating on Purpose! – Backgrounds/Stories need to be known. – MCX’s sibling issues; holistic approach. Era Business School Ajay K Raina; AJ4
  5. 5. Unrolling the Carpet • BE from Mumbai. • Joined 100 Cr BOLT; turned a still birth into a miracle child. • 5Lac/Mortgage – 1995. • 5 Terminal FTIL. • 5000 Workforce; 80% of domestic base. Era Business School Ajay K Raina; AJ5
  6. 6. And the Rise Defied the Gravity • • • • • • • MCX in 2003. NSEL in 2008. IEX in 2008. MCX-SX (CD) in 2008 and 2012 (full). Set up exchanges in five countries. NBHC. Forbes list of Richest Indians. Era Business School Ajay K Raina; AJ6
  7. 7. Before we Trudge on, some Memory Pegs…. • Derivatives. • Futures and Forwards. • Options. • Cash settlements v/s Delivery. • Spot. Era Business School Ajay K Raina; AJ7
  8. 8. Commodity Futures Markets….. • • • • • • • • Gud’ol days – BCTA 1875. Cotton to oilseeds and foodgrains. Between two great wars. Defence of India Act. Mid 1950s to mid 1960s. Pepper and Turmeric when Pak came calling. The Khusro & Kabra Committees; Reforms’91. Dirty Dozen and wow! Era Business School Ajay K Raina; AJ8
  9. 9. ….Commodity Futures Markets • The big 6 (MCX, NCDEX, NMCE, ICEX, ACEDCEX, UCE + 16 commodity specific. • 113 commodities. • No options, no trading in Urdh, rice and Tur. • Why dis Kolavari di? – Price discovery and risk management. – Demand-supply equations: Harvest & Lean. – Seasonal amplitudes. – Causes inflation? Era Business School Ajay K Raina; AJ9
  10. 10. An Inefficient Guardian • FMC regulates. • NSEL misusing the name = doubts! • Tools:– Limit on open position of an individual members as well as client to prevent over trading; – Limit on price fluctuation (daily/weekly) to prevent abrupt upswing or downswing in prices; – Special margin deposits to be collected on outstanding purchases or sales to curb excessive speculative activity through financial restraints; – Times of shortages. – Daily reports from the Exchanges to check excessive speculation and price volatility. Era Business School Ajay K Raina;
  11. 11. Part 2 – Family Lineage Era Business School Ajay K Raina; AJ11
  12. 12. Era Business School Ajay K Raina;
  13. 13. MCX since 2003… • The Multi Commodity Exch of India Ltd. • FMC regulated. • Commodity Futures Trade – online trading, clearing and settlement of commodity futures transactions = risk management. • 30 commodity futures contracts across segments including bullion, ferrous and non-ferrous metals, energy, and agricultural commodities. Era Business School Ajay K Raina;
  14. 14. ……MCX….. • Extensive national reach, with 2100+ members, 400,000+ trading terminals spanning 1770+ cities and towns across India. • Market share of 87.3% (value traded). • 3rd largest commodity futures exchange in the world (No of contracts traded). • World's largest exchange in silver and gold futures, 2nd largest in copper and natural gas futures, and the 3rd largest in crude oil futures. Era Business School Ajay K Raina;
  15. 15. ….MCX…. • MCXCOMDEX- gives information on market movements in key commodities. • Other commodity indices developed by the exchange include MCXAgri, MCXEnergy, and MCXMetal. • Holds ISO 9001:2000 quality management standard, ISO 27001:2005 information security management standard and ISO 14001:2004 environment management standard. Era Business School Ajay K Raina;
  16. 16. ….MCX…. • Strategic alliances with leading international exchanges such as CME Group, LME, SHFE and TAIFEX. • Electronic trading platform by promoter, FTIL; difficult to replicate exchange technology+ Innovations give MCX its competitive edge. • 15 notable awards. • Key shareholders- FTIL, SBI and it's associates, NABARD, NSE, Fid Fund (Mauritius) Ltd., Corp Bank, UBI, Canara Bank, BoI, BoB, HDFC Bank, SBI Life Insurance and NCDEX. Era Business School Ajay K Raina;
  17. 17. Making the Difference… • 2003:Born to Innovate– Futures evening sessions to synchronise with global exchanges. • 2004 : NAFED+FTIL= Agreement= Spot Exch. • 2005: MCX-COMDEX launched; Hi, London. • 2006 : Hello, NYMEX + Hi, Euronext. • 2009: Ni Hao, Shanghai. • 2010: Howdy Taiwan! • 2011: Micro contract in Silver – IKg. Era Business School Ajay K Raina;
  18. 18. …. Making the Difference • 2011: Micro contract in Gold – 01 gm. • 2012: IPO rated 5/5 by CRISIL; over-subscribed by 54+ times; first listed exch of India. • 2013: Recorded highest daily turnover –INR 1200b in April. • 2013, however, is not over yet; the ride continues! Era Business School Ajay K Raina;
  19. 19. Comparison with Index Era Business School Ajay K Raina;
  20. 20. MCX AXED Era Business School Ajay K Raina;
  21. 21. Not too Far Back • MCX-SX v/s SEBI in 2010. – FTIL holds 31.18% stakes in MCX. – FTIL and MCX each hold 5% stake in MCX-SX. • MCX-SX v/s NSE (CCI) in 2011. • With not many friends around, a sister concern of MCX, NSEL (99.99% market share of Spot Business; since 2008) with its promoters, FTIL and NAFED, flirts with disaster by crossing a line………… MCX pays for its affinity. Era Business School Ajay K Raina;
  22. 22. NSEL – an Affair to Forget… • Licensed to do spot trading, NSEL was found dealing with future contracts running into 12-36 days….. Mid July 2013. • Naked contracts added to the problem. • 07 days – cuts D,P & S period down to 11 days. • 15 days – Suspends all one-day fwd contracts except e-series ones; creates 5600 Cr Liability. • FTIL shares tank 65%...... MCX sinks too; trade volumes drop by 98% over two weeks. Era Business School Ajay K Raina;
  23. 23. The Downfall: 2012-13 Era Business School Ajay K Raina;
  24. 24. ….NSEL – an Affair to Forget • MCX-SX loses bank guarantees. • NSE sells its stake in MCX. • NSEL makes promises; defaults in payment plan. • WH Receipts rumoured to be fake. • FTIL’s stake in MCX down to 26%. • NSEL, FTIL and MCX neck-deep into trouble even though MCX has nothing fundamentally against it. Era Business School Ajay K Raina;
  25. 25. Part 4 – Bodyline Days Era Business School Ajay K Raina;
  26. 26. Challenges for MCX: Beyond • Collateral Damages:– Main promoter’s fortune wiped from $ 2b to less than $100m over one month. – Questions being asked about ability of the flagship to run exchanges. • FMC may move from Consumers’ Affairs to FM. Era Business School Ajay K Raina;
  27. 27. Earning Drivers • To understand other challenges, a look at the financial model:– Transaction fees – almost 50% of total earnings. – Membership admission fees – Annual subscription fees – Terminal charges Era Business School Ajay K Raina;
  28. 28. .. Challenges for MCX: Transactions • CTT issues; 20% decline expected as in case of STT. • Reduced Volumes:– Over-dependence on bullion and changing import duties and curbs. – Uncertain movement of gold prices internationally. Era Business School Ajay K Raina;
  29. 29. .. Challenges for MCX: Other Issues • Post facto sanction for FDI investment declined. – Reverse mobility of capital. – Future investments affected. – Later relaxations show flip-flop in policy making. • Income from Fees:– Reduced confidence. – Potential stakeholders cautious. – Expansion of terminals not likely as of now. • Buy out bids…. Kodak Group? Era Business School Ajay K Raina;
  30. 30. The Road Ahead…. • Scenario 1 – Bye-bye Mr Shah – Forced by present circumstances though Shah’s innovative drive would be missed. – Mr Shah is, however, a hard nut to crack and may not easily give in. – Resultant ‘tug of war’ will add to the negative sentiments. – Will govt step in and take over FTIL/NSEL? Era Business School Ajay K Raina;
  31. 31. ….The Road Ahead…. • Scenario 2 – Buy out of FTIL’s Stake – Shah goes but new management likely to fill in. – Faster restoration of investors’ confidence likely; probably the best option for investors. • Scenario 3 – Govt takes over NSEL; MCX? Era Business School Ajay K Raina;
  32. 32. Part 5 - CONCLUSION Era Business School Ajay K Raina;
  33. 33. The Recent & the Latest….. • Rs 5,600 crore dues to 148 members/brokers, representing 13,000 investors of NSEL; 128 Cr. • The re-payment plan failed on four occasions. • Talks about compulsory regn with WDRA (Warehousing Devp & Regulatory Authority). • Probe panel chaired by economic affairs secretary + EOW investigations on. Era Business School Ajay K Raina;
  34. 34. • MCX claims “हम आप क हैं कौन?’’ but gives े guarantees; probe on. • 84% upward move in MCX share price over past two weeks. • Market cap of MCX as on date is 2285 Cr. • Settlement Guarantee Fund as part of risk management exercise by FMC. • FMC sees change of parenthood. • MCX-SX license renewed for another year but with conditions and warnings by SEBI. Era Business School Ajay K Raina;
  35. 35. Era Business School Ajay K Raina;
  36. 36. Konfused!! • If FTIL had to play dirty, why did it choose NSEL instead of MCX? • If FMC deals with Futures, why is it called Forwards Markets Commission? Era Business School Ajay K Raina;
  37. 37. Era Business School Ajay K Raina;