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Chennai bourse may merge with Bombay Stock Exchange

Our Bureau

CHENNAI, Nov. 19

THE Madras Stock Exchange (MSE) plans to either merge itself with the Bombay Stock Exchange (BSE) or corporatise itself within six months, according to the MSE President, Mr D.N. Das.

He told a press conference here on Monday that discussions were underway with the BSE on the merger. Crucial issues such as concessional membership in the BSE and capitalisation of assets had to be sorted out before the merger could be completed.

If the merger was not completed within six months, MSE would fully corporatise itself by issuing shares and also demutualise itself and invite investors such as domestic and foreign financial institutions, he said.

Such a move, he said, would give a fillip to the financial strength of the exchange and also create a niche market in southern parts of India. This was among the steps thought of by the exchange to face competition from BSE and the National Stock Exchang e, and also to increase the income streams of brokers.

He said MSE had a turnover of about Rs 1 crore a day and had about 175 members on its rolls, of which 75-100 were active. Of the 1,754 companies listed on MSE, 50-100 were active scrips.

Mr Das said the exchange planned to offer depository functions through its subsidiary, MSE Financial Services Ltd (MSE FSL). The exchange planned to inaugurate this service by January 2002 and hoped to get about 5,000 clients before March. MSE was a clea ring member of the CDSL (Central Depository Services Ldd) floated by BSE. Initially, the depository services would be available in Chennai and later extended to other parts of the State.

The exchange also hoped to introduce derivatives segment and stock futures. It was considering introducing debt trading also. These services were expected to be started in January-February.

Mr Das said MSE planned to expand its trading terminals — MANTRRA — to other parts of Tamil Nadu. Connectivity would be established through virtual private networks. Limited membership would be given to sub-brokers, who could trade on the e xchange but would not have voting rights.

The exchange would undertake an investor awareness programme along with BSE and CDSL between December 14 and 19, in five centres in Tamil Nadu.