Source: Nyse Euronext
NYSE Euronext (NYX), the world's leading and most diverse financial market group, today announced that it has signed a binding term sheet to acquire a 5% equity position in the Multi Commodity Exchange (MCX), India's leading commodity marketplace, subject to certain conditions.
The 5% equity investment is the maximum equity interest permitted by foreign investors in derivative exchanges under current Indian law. Closing of the transaction is expected to take place during the first half of 2008, subject to all relevant regulatory approvals.
MCX is India's No. 1 commodity exchange for the trading of precious metals, ferrous and non-ferrous metals, energy, agriculture and industrial commodities. Founded in 2003, MCX has exhibited strong leadership in product innovation, trading and clearing functionality, self-regulation, transaction cost efficiency and customer focus, positioning MCX to compete on a global scale.
"We believe that our investment in MCX will produce new business opportunities for NYSE Euronext in the commodities sector and deliver value to NYSE Euronext shareholders," said Duncan L. Niederauer, NYSE Euronext Chief Executive Officer. "This transaction underscores our long-standing commitment to India and is consistent with our strategic business goal of aligning NYSE Euronext with partners globally and diversifying our product portfolio."
Mr. Jignesh Shah, Managing Director and Chief Executive Officer of MCX added, "The milestone bears testament to the quality of the institution we have built where the best of India and the world converge. It is a statement on India's economic standing and we are proud to be part of it."
In addition to NYSE Euronext, other shareholders in MCX include: State Bank of India and its associates (SBI), National Bank for Agriculture and Rural Development (NABARD), National Stock Exchange of India Ltd. (NSE), SBI Life Insurance Co. Ltd., Bank of India (BoI), Bank of Baroda (BoB), Union Bank of India, Corporation Bank, Canara Bank, HDFC Bank, Fid Fund (Mauritius) Ltd. - an affiliate of Fidelity International, ICICI Ventures, IL&FS, Kotak group, Citibank, Merrill Lynch and Financial Technologies.
Currently, there are 14 corporate listings from India on NYSE Euronext markets, 12 on the New York Stock Exchange and two on Euronext, whose combined total global market capitalization exceeds $110 billion. On July 31, 2006, MCX and Liffe, NYSE Euronext's derivatives business, entered a licensing agreement for MCX to use Liffe futures prices, enabling MCX to list domestic 'mini' futures contracts for both robusta and white sugar based upon Liffe futures prices and to identify other areas of potential collaboration.