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Vinod Mathew

AHMEDABAD, March 18

THE Ahmedabad Stock Exchange (ASE), which has hit a lean patch ever since the rolling settlement came into force, is betting on commodity futures to bail it out of its present rut. ASE has come out with an unique proposition whereby at least a portion of its unused online trading capacity will find an alternative use.

Towards this, ASE has inked a pact with the 40-year old Ahmedabad Commodity Exchange Ltd, which has a daily volume of over Rs 20 crore, to augment its business that was otherwise on a free fall. ASE is betting on a manifold growth of the commodity futures business in the coming days as it tries to come to terms with not so hot days for the smaller stock exchanges.

The need for ASE to look outside its members for online trading arose as its daily volumes have shrunk from around Rs 300 crore to Rs 60 crore in the past couple of months. Simultaneously, the number of trades have nose-dived from 35,000 per day to only 13,000, thus leaving untapped a daily system capacity in excess of 85,000 trades. ACE, which at present has a daily volume of up to Rs 25 crore from some 4,000 trades is looking at the prospect of at least doubling both its volumes and the number of trades by August-September this year. This is expected to transpire both on account of a membership drive that is already under way and the increased number of products that now feature under the futures basket.

ASE, which signed an MoU with ACE on Saturday, hopes the utilisation of the online trading platform by their commodity brethren would halt the slide in its fortunes if not totally reverse the downward trend.

Mr Atul Choksi, Director, ASE, told Business Line that the second oldest stock exchange in the country, which began online trading in December 1999, has pegged its hopes on the futures trading in commodities as its mainline activity in the coming days.

``ASE has represented before the Securities and Exchange Board of India (SEBI) that its members be allowed to trade in commodities. Till such time that the present rules prevent us from doing that it has been decided that the ASE members be allowed to nominate members to ACE. To that extent, the ASE members can now nominate their associates to the commodity exchange to tap the growing opportunities in agriculture futures'', Mr Choksi said.

With real time trading of agriculture futures making possible instant access to farmers both within and outside the State, it appears that the Ahmedabad bourse has finally found a way to slay its monster called rolling settlement. At least, that is the considered opinion of the ASE members, many of who are raring to have a go at the agriculture futures, either on their own with the necessary SEBI blessings or through their nominated friends on the commodity exchange.

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An ACE up Ahmedabad stock exchange's sleeve -- Inks pact for online trading

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