Dubai Multi Commodities Centre is learnt to be in talks with the Multi Commodity Exchange to pick up a stake in the local company.
MUMBAI: Dubai Multi Commodities Centre (DMCC), owned by the Dubai government, is learnt to be in talks with the Multi Commodity Exchange (MCX) to pick up a sizeable stake in the local company. Sources close to the development said DMCC, which plans to increase its traction in the Asian commodity marketplace, would initially pick up a minor ownership in the MCX and later increase it following MCX’s initial public offering (IPO).
MCX officials refused to comment on the development. The exchange is planning an initial public offering (IPO) to raise about Rs 300 crore and is awaiting government norms on foreign ownership in commodities exchanges. The norms are expected in four-six months’ time.
Recently, there were reports that US-based New York Mercantile Exchange is eying a 9% stake in MCX for about $60 million. In early 2006, foreign institutional investor Fidelity International had picked up more than 9% in MCX for $49 million.
As of today the major shareholders of MCX other than its promoter Financial Technologies are State Bank of india, Nabard, the National Stock Exchange, Union Bank, Canara Bank, Bank of India, Bank of Baroda, HDFC Bank and SBI Life Insurance.
DMCC, MCX and Financial Technologies had together set up the Dubai Gold and Commodity Exchange, which had commenced trading more than a year back.
The development unfolds shortly after the New York Stock Exchange Group, General Atlantic, Goldman Sachs and Softbank Asian Infrastructure Fund bought 5% each in the National Stock Exchange. This happened after the government allowed foreign investment up to 49% in the country’s stock exchanges. However, foreign direct investment in stock exchanges is capped at 26%, while foreign institutional investment is sealed at 23%.
Industry watchers are expecting a similar norm on foreign investment in commodity exchanges as well.
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