MCX-SX aims to begin trading with 1,200 stocks

We will list liquid stocks of BSE and NSE under permitted category initially: Jignesh Shah

MCX-SX, the latest entity to set up a full-fledged stock exchange, on Thursday said it expects to begin trading with about 1,000-1,200 stocks when it starts operations around Diwali.

"We will list liquid stocks of BSE and NSE under permitted category initially," MCX-SX vice-chairman Jignesh Shah said here on Thursday at the roadshow for membership drive. "Though the research team is still working on this, the number of scrips could be 1,000-1,200 of sum total of 5,500 scrips listed in other bourses," MCX-SX Managing Director & Chief Executive Officer Joseph Massey said.

The exchange would begin negotiating with companies about six months later for proper listing on its bourse, official said. MCX-SX will commence trading in cash market and derivative segments (futures and options). The debt market trading would be introduced later.

Asked about reducing the market transaction fees and the trading volume at which the exchange would break-even, Massey said much depended on exchange earnings, but indicated the bourse was likely to become profitable from the start.

MCX-SX had offered up to 50 per cent reduction in transaction fees and "cost optimal" membership fee structure. Shah said lower transaction charges will be of direct benefit to investors. Moreover, the exchange would publish market reports in regional languages to help people not comfortable with English.

Meanwhile, asked why MCX-SX chose to have a 40-share index, Shah said 30 scrips will be the same as on BSE, but the rest 10 would reflect the growth story of India.

The exchange would focus on fixed income products in rural areas, as they were less riskier investments than equity, he said. The exchange also announced it will provide 1,000 education and training programmes, with first 500 members who will go live on the exchange. The exchange will conduct two such programmes per broker, with half of the cost of the training to be borne by the exchange.