Deutsche Boerse AG is planning to invest in two new Indian securities markets being developed by the Bombay Stock Exchange. The investments would broaden Deutsche Boerse’s financial commitment to Asia’s oldest stock exchange.
BSE Ltd. Chief Executive Officer Ashishkumar Chauhan said in an interview that the German exchange operator will invest as much as 5 percent in a planned commodities exchange. Deutsche Boerse will also take a holding in a new stock-trading venue based in Gujarat state.
In 2007 the German firm bought a 5 percent stake in BSE announcing a
wide-ranging technology alliance in 2013 that has led the BSE to
move its equity and derivatives platforms on to Deutsche
Boerse’s N7 trading network.
BSE could rebuild its market share against its main domestic rival, National Stock Exchange of India Ltd., due to the much faster transaction speeds.
“By getting Deutsche on board, BSE’s exchanges will
benefit from better technology, ideas, innovation and best
practices,” Jagannadham Thunuguntla, the head of fundamental
research at Karvy Stock Broking Ltd. in the southern Indian city
of Hyderabad, said in a phone interview.
“India is bracing up for competitive action on the exchange front as the markets are projected to grow.”
In March BSE’s share of Indian stock trading will reach 18 to 20 percent, compared with 13 to 14 percent a year earlier. Chauhan said that it will account for 30 percent of equity-derivative trades, up from 15 to 20 percent. BSE’s currency derivatives now account for half the market, compared with 2 to 3 percent a year ago.
NSE will also launch a new stock exchange in Gujarat. The rival market operators will open their venues inside a new special economic zone that is being developed on the outskirts of Gandhinagar, the state capital.
