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Sunday, January 11, 2009

Reliance Money, FTIL plan to set up their own stock exchanges

Reliance Money, the broking arm of Reliance Capital and Financial Technologies India (FTIL), which operates one of the world`s largest exchange networks are pondering over the idea to setup their own stock exchanges, reports Business Standard.

Both the companies see a huge scope in this business as only 5% of Indian households invest in equities compared to the international average of up to 50%. The companies also have plans to enter the rapidly growing business of equity derivatives, which are basically instruments whose value is at least partly derived from one or more underlying equities.

Currently National Stock Exchange enjoys a virtual monopoly in equity derivatives with daily average volumes at Rs 100 billion in the spot segment. In comparison, the Bombay Stock Exchange has daily average volume of just Rs 40 billion. The NSE`s daily average volume in derivative segment is Rs 400 billion.

Reliance Money is already a big player in commodities exchange space after picking up 10% in the National Multi Commodity Exchange (NMCE). Now the company wants to increase its holding to 26%. NMCE has applied to the Securities and Exchange Board of India (SEBI) to set up a currency futures exchange.

Reliance Money`s spot exchange for agriculture commodities is also expected to start trading next month.

The FTIL group which has interests in a currency futures exchange, commodity futures, power exchange and spot exchange for agricultural commodities and plans to set up an exchange for SMEs.


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