MCX Q3FY17 Concall Summary

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MCX Financials Q3Fy17

Financial Highlights

  • The company increased its fees at the start of Quarter 3 FY17 without any adverse impact on volumes
  • The fall in volumes has been on account of change in margin requirement from 1 day to 2 days. However volumes have recovered In January.
  • Company introduced Variable pay in the start of financial year for some employees for which 3.5 Crores pertaining to previous two quarters was also booked in third quarter. Rs 1.75 Crore for the current quarter was also booked in addition.
  • Company shifted office from Mumbai to Delhi and therefore incurred a number of one time expenses were incurred.
  • Dual cost of Rs. 13 lacs
  • Rs. 25 Lacs for Server movement
  • Rs. 31 lacs towards one time audit requirement as per SEBI’s rules
  • Revamp of company’s website which cost Rs. 50 lacs
  • Expenses totaling Rs 5 Crore were one-off and charged to P&L Account in this year.
  • There might be a fall in revenue when options are launched which is common across the board as the fees is earned on the premium portion. But with rising volumes the revenue is expected to increase.

 Share Capital Overview

Share capital overview of MCX

Important Highlights

  • Bullion was the most widely participated commodity on MCX
  • Company will set up its own clearing house in Q1 of FY1
  • SEBI is looking to give approvals to new products which will benefit the company
  • Guidelines for options is expected soon from SEBI. The initial draft points at allowing one agri and one non-agri commodity.
  • To connect with wider base, MCX is exploring agri-products seriously.
  • Some banks have shown interest in Options trading and RBI may grant permission for the same.
  • Participation of banks in commodity market will be a positive development as they can lend some depth to the market and also act as clearing agents.

GIFT City

  • The International Exchange set up by BSE in GIFT city has various Tax exemptions including NIL CTT and MCX is exploring the opportunity to set up its own exchange there.
  • There is still a bit of ambiguity in lots of guidelines in relation to GIFT city
  • All trading in GIFT city will be done in Dollars
  • After approval of options the enquiries for new membership have gone up significantly
  • Only non-agri products for derivatives will be allowed

Impact of Demonetisation

  • There was a change in the mix of commodities traded in response to Demonetisation with decline in Bullion participation. Company expects it to stabilize once cash crunch gets over.
  • Company expects shifting of organized to unorganized. For example- Dabba market
MCX Volume Share

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