The Bombay Stock Exchange is confident that the monthly contract expiry for Bankex will turn out to be as sound as its weekly expiries, and market participants will continue to show the same trust and support that the weekly contract have been receiving.
In conversation with CNBC-TV18, Sundararaman Ramamurthy, MD & CEO, BSE said the choice of Sensex as the weekly contract expiries was always clear, after market regulator's recent requirement of only one weekly contract for each stock exchange.
"In our mind, Sennex was always the choice for weekly contracts, as it is the oldest benchmark, and for every investor and common man, Sensex is the barometer," Sundararaman Ramamurthy said. It has its own unique position, he said, adding BSE did not want to take that away by putting it for monthly expiry.
The weekly expiry of Sensex contracts have higher volumes than that of Bankex, but the reason to choose Sensex was its 'inherent strength' as a barometer, Ramamurthy said. He added that there will be 'no re-think' on the choice of Sensex as the contract for weekly expiry, as the index has a unique position in the stock market, in terms of 'connect' with the market participants.
On a YTD basis, BSE shares have more than doubled with 115% gains, with a large part of the upmove coming in the last three months alone. BSE has a market capitalisation has now reached over Rs 61,000 crore.
When asked if the changes ushered in by the capital market regulator Sebi will in any way affect volumes, Ramamurthy said it is too early to comment. "Volumes have been lower, but it could be due to many reasons, and we have to watch and watch."
BSE said that the overall market trading volumes will fall after the weekly contracts are discontinued and till the monthly F&O products pick up, however, CEO Ramamurthy did not share a number on the extent of fall that one could look at.
BSE CEO sounded confident that overall trading volumes will rise, going forward.
When asked about a comparison between trading volumes between NSE and BSE, Ramamurthy said the stock exchange is not looking at success in terms of market share of volumes, but rather on how the market can be expanded to reach to more participants.
BSE said is targetting to take to market participation to over 600 brokers and 500 FPIs, and is working on ramping up volumes. However, BSE CEO added that they will not benchmark the exchange in terms of market share, as the participation is 'not fully mature'.
During the June quarter earnings call, BSE had expressed confidence that the regulatory changes by capital market Sebi will also provide new opportunities for the company to grow, and BSE is not overly worried on impact on volumes.
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