11
May
14

NSE buys 5 percent more into NCDEX..

Shree Renuka Sugars pared down its 7.5 percent stake in NCDEX from 12.5 percent to 5 percent. Total sale amount which sugar company received for NCDEX was Rs 66.54 crore. With this stake sale, India’s second largest commodity exchange, NCDEX has been valued at 887.2 crore. Important thing to note in this stake sale was that NSE bought 5 percent into the commodity exchange. With recently changed FMC guidelines about shareholding of commodity exchange, stock exchange can hold up to 15 percent. NCDEX stake buy gives NSE hold in the commodity space.

In my previous post I had written about MCX being a good contra buy (https://writingoptions.wordpress.com/2014/05/09/mcx-good-contra-buy/). MCX holds close to 85 percent market share versus 14-15 percent market share of NCDEX. MCX holds cash & cash equivalents of 1200-1300 crore and zero debt. There are few concerns about potential liabilities in terms tax penalty and listing agreement violations. But despite all these concerns, MCX remains a great buy and NCDEX stake confirms my belief about value in it. I think BSE might be interested in buying into MCX.

Disclaimer: These are my personal views and you should do your own due diligence before acting on anything written in this blog. Please take reasonable care while trading in options, especially while selling. I am not advising anyone to sell or buy options. My purpose of writing this blog is to highlight my trading strategies

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