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| Edited By: Nitin Shrivastava,Sachin P Mampatta |Source: DNA |Updated: Mar 17, 2018, 03:52 AM IST
The New York Stock Exchange (NYSE) is selling its 5% stake in the National Stock Exchange to Temasek Holdings, an Asia investment company headquartered in Singapore.
The move comes on the back of NYSE’s inability to raise its stake in India’s biggest bourse and NSE’s own recent tie-up with rival Chicago Mercantile Exchange (CME).
A person familiar with the matter said the New York exchange had been trying to raise its stake in the domestic bourse for sometime, but had been facing regulatory hurdles.
According to Securities and Exchange Board of India regulations, no entity, except certain specified financial ones, are allowed to own more than 5% of an exchange.
The NSE in March entered into an agreement with the CME for creating Nifty-based futures contracts on the CME and similar contracts on the S&P 500 and the Dow Jones Industrial Average on the NSE. This was the first time the two US indices were to be traded outside of the United States.
NYSE was uncomfortable with the situation since it competes with the CME in many markets.
The NYSE stake was valued at $150 million (Rs 675 crore), which puts the value of the NSE at $3 billion (Rs 13,500 crore), according to a report in VCCircle.
The valuation could not be independently confirmed.
An email sent to the NYSE remained unanswered at the time of filing.
Meanwhile, the new investor in the NSE sees it as a play on the India story.
Manish Kejriwal, senior managing director, Temasek, said, “Temasek continues to focus on investments in India and believes in the country’s long-term potential. We see our investment in NSE as a good proxy to India’s economic growth and the development of its capital markets.”
As of March 2010, there were 1,470 companies listed on the NSE with a combined market capitalisation of Rs 60 lakh crore. The average daily trading turnover on the exchange is currently around Rs 88,000 crore.
The bourse has a nearly 100% share of the equity derivatives segment and over 75% share in the cash market, with the Bombay Stock Exchange accounting for the rest.
