In an effort to explore new opportunities, the Bombay Stock Exchange (BSE) is bringing together its strategic partner Singapore Exchange Ltd and the Indian capital market players on a common platform.
The round-table meeting, to be held on 2 August here, will be attended by the equity and capital market heads of leading merchant bankers such as JM Financial Ltd, Enam Financial Consultants Pvt. Ltd, JP Morgan India Pvt. Ltd and Kotak Mahindra Capital Co. Ltd among others. These players help companies raise money through initial public offerings (IPOs) in domestic markets and depositary receipts or external borrowings in international markets.
Lawrence Wong, executive vice-president and head of listings at Singapore Exchange, will attend the meeting, which merchant bankers say will explore all possibilities of taking the relationship further. Singapore Exchange holds 5% stake in BSE after the Indian bourse became a corporate entity.
After the change in the ownership structure of BSE, there have been informal meetings between the Singapore Exchange and various bankers from time to time, but this is for the first time that a formal meeting is being organized by BSE.
Rajnikant Patel, chief executive officer of BSE, refused to discuss the meeting. However, merchant bankers say the agenda of the meeting is to get the industry view on how Indian companies can benefit from the partnership of Singapore Exchange and BSE.
“We would like to see if the BSE-listed companies, who go through a due diligence process at the time of listing, can get the permission to trade on Singapore Exchange directly,” said the equity and capital markets head of a merchant banking outfit, who didn’t wish to be named.
Singapore Exchange has 467 domestic and 255 foreign firms listed on it and has a market capitalization of more than $500 billion (Rs20.25 trillion). Apart from listing of companies, it provides a window for alternative forms of listing such as listing of structured warrants and real estate investment trusts.
Singapore Exchange became a shareholder of BSE as a part of the latter’s demutualization programme. Until May, BSE was owned 100% by the 790 broker-members. The broker-members sold their stakes up to 49%, but retained their membership rights. Nineteen investors picked up 41% stake and the remaining 10% was sold to Deutsche Borse and Singapore Exchange, which picked up 5% each for Rs189 crore at Rs5,200 a share.
BSE, despite being a 132-year- old exchange, lags its younger sibling National Stock Exchange (NSE), which clocks an average daily trading turnover of Rs9,221 crore, against the former’s turnover of Rs4,536 crore.
In the derivatives segment, where futures and options of indices and stocks are traded, NSE’s daily average volume is Rs38,000 crore.
Till a few months back, BSE had miniscule trading volumes in this segment, though that figure has risen to Rs362 crore in November 2006 and further to Rs845 crore in June 2007.