MSEI chalks out five-year turnaround strategy

It will position itself as an exchange for alternative financial asset class, like currency, interest rate futures, bulk and block deals and ETFs

Metropolitan Stock Exchange of India (MSEI), formerly known as MCX Stock Exchange (MCX-SX), has drawn a new turnaround strategy, under which it will position itself as an exchange for alternative financial asset class, like currency, interest rate future (IRF), bulk and block deals and Exchange Traded Funds (ETF).

To start with, in the phase of turnaround strategy over five years starting FY17, MSEI will launch new contracts for currency derivatives, IRF spread, interest rate options and currency index soon, said Udai Kumar, managing director and CEO, MSEI.

"NSE and BSE have an established leadership in equity and equity derivatives, which will be difficult to breach. We will be focusing on developing the alternative asset class, as it will help in providing a level playing field to Indian corporate entities vis-?-vis their global counterparts," said Abhijit Chakraborty, chief financial officer and corporate strategy, MSEI.

At present, about 95 per cent of MSEI's turnover is from currency derivatives segment. MSEI's turnover in the currency derivatives segment is close to Rs1,000 crore, and the exchange expects the turnover to Rs 6000 crore by the end of financial year 2016-17, said Kumar.

The exchange is planning to tie-up with asset management companies (AMCs) to launch exclusively listed ETFs in its exchange. This apart, it will also launch INR index benchmarked to other currencies soon. The exchange has sought Reserve Bank of India clearance for the product.

"MSEI is also targeting bulk/block deals market, which had an annual market volume of Rs 2,00,000 crore for FY16. MSEI already has some 1148 companies in permitted to trade category. This list would be expanded to 4,000 to cover most of the traded stocks," said Chakraborty.

In September 2014, after the Rs 5,700-crore payment crisis at the National Spot Exchange Ltd (NSEL), MCX-SX went for a name change and it was rechristened as MSEI. The name change was part of its turnaround strategy, to give the exchange a new identity, disassociate from its original promoters, and shift to a high-growth phase.