Big Rush To Buy Intercontinental Exchange’s ‘Extra’ Stake In NCDEX
US-based Intercontinental Exchange Holdings Inc, which has an eight per cent stake in India’s National Commodity Derivatives Exchange (NCDEX), may have to pare its stake by three per cent to five per cent, according to the norms stipulated by market regulator SEBI.
The Atlanta based exchange has been approached by many financial institutions to acquire this stake, a report says, quoting ICE CEO Jeff Sprecher. He said he was being “approached by a host of institutions, including global exchanges, financial services companies and banks for the ‘extra piece’ it holds”.
Meanwhile, ICE is also in talks with the Indian government to explore the “possibility of holding on to its current 8 percent stake in NCDEX”. If this does not work out, ICE will have to lower the stake to the mandatory 5 percent regulatory cap. Sprecher was speaking at the Reuters Exchanges and Trading Summit on Wednesday.
ICE bought a 8 percent stake in the NCDEX last year. Similarly, investment bank Goldman Sachs also holds a 7 percent stake in the commodity exchange, which also have to be pared. Likewise, Fidelity International holds 9 per cent stake in NCDEX’s rival Multi Commodity Exchange of India (MCX).
Many other global financial firms like have entered India to get a share of the booming commodities trading. Citigroup and Merrill Lynch had each bought 5 percent in MCX. In Fenruary, NYSE Euronext, bought a 5 percent stake in MCX for $55 million.
The Indian government passed legislation in January this year, putting a cap on individual foreign investments at 5 percent.
