In a market scenario where leverage is scarce for derivative traders and there are no major buyers for most small- and mid-cap stocks, Multi Commodity Exchange (MCX) has seen a huge build-up of futures and options positions ahead of its board meet on October 23.
The share price of MCX has witnessed a 23 per cent jump in just 12-14 trading sessions in this month even as broader markets suffered collateral damage.
The analyst community is mostly surprised by the rise in MCX shares at a time when the BSE and the NSE launched commodity trading on their platforms. Such development could directly impact the bottom-line of MCX due to a three-way fight between the bourses for market share in coming months, said an analyst. But, the reverse has been true for MCX share price since the start of October.
A few high net worth players anticipate that a formal proposal for a merger of MCX and NSE or a valuation report for MCX is likely at the board of the commodity bourse this month, sources told
“Speculation of a merger between NSE and MCX has been in markets since the beginning of 2018 but the rally in MCX share price has fizzled out within days. This time, if few traders are holding on to their position even in extreme market conditions, it shows their confidence on timing of the events,” said a promoter of a leading brokerage house.
MCX did not comment on an email query from BusinessLine on the deal, valuation report or the board meet agenda.
Share prices zoom
Between August and September, MCX share price fell over 25 per cent as broader indices Sensex and Nifty witnessed a 15 per cent decline. But the stock started gaining ground from October month derivative series. As on date, the open interest in MCX stood at over 45 lakh shares in futures segment alone.
Another source close to MCX said the rally in share price could also have been in anticipation of good quarterly results as the turnover of the exchange has risen in the past few months.