NSEL fiasco hits MCX-SX hard

The MCX Stock Exchange (MCX-SX), slipped into deep losses during FY 14 as the settlement crisis at the National Spot Exchange Ltd eroded members confidence, which led to sharp decline in trading volumes. The MCX-SX reported a net loss of Rs 154 crore during FY14 as compared to a net profit of Rs 21 crore during FY13.

Additionally, the restriction imposed on the currency derivatives segment by the financial market regulators last year to curb rupee volatility also led to decline of volumes in the exchange. However, with new management in place, the exchange is now hoping to regain some of its lost ground through product innovation and enhanced customer service initiatives.

“2013 has been challenging year for our exchange. Inspite of robust systems and processes, the payment crisis at NSEL lead to severe erosion of member confidence leading to declining volumes in the newly launched segments of the exchange,” said an MCX-SX spokesperson.

Last year, Jignesh Shah and Joseph Massey, who were respectively the vice- chairman and managing director of MCX-SX had to step down following the Rs 5,600 crore settlement crisis at National Spot Exchange.

The dismal show by India’s newest stock exchange comes when its competitors — the national stock exchange and the bombay stock exchange reported net profits of Rs 937.97 crore and Rs 74.77 crore respectively during the same period.