Gold & silver F&O contracts on BSE? Market wizard Anil Singhvi decodes what it could mean for MCX

Share Market News: Will you be able to trade in gold and silver on BSE soon? Stock exchange BSE will launch derivatives (futures and options) contracts in bullion soon, according to news agency Reuters. While BSE shares zoomed after the report on Thursday, with investors already cheering the exchange's strong financial results released the previous day, the MCX stock faced selling pressure. BSE shares ended 7.9 per cent higher at Rs 2,589 apiece - after skyrocketing as much as 10.8 per cent to Rs 2,657 during the session - while MCX shares declined 1.9 per cent to settle at Rs 4,205 apiece on NSE.

What will a commodities foray mean for BSE? Remember, BSE already trades in a range of segments including equities and equity derivatives, whereas commodity derivatives exchange MCX offers trading in segments such as bullion, industrial metals, energy, and agricultural commodities.  

What will the launch of bullion futures mean for BSE? Here's what market guru Anil Singhvi thinks

According to Zee Business Managing Editor Anil Singhvi, such a move will be positive for BSE and negative for MCX. 

"Such a move can cause a de-rating for MCX," said the market guru.

He listed several reasons supporting his view: 

• A successful foray into bullion derivatives can be a cash cow for BSE
• Gold and silver contracts account for 43 per cent of total volumes on MCX
• Currently, MCX is considered the primary exchange for bullion derivatives trading
• MCX may get a major rival for the first time ever
• BSE has already revealed intent to foray into commodities in a big way
• BSE is stronger in several aspects including penetration, size, technology & management

At the time of publishing this report, the BSE portal showed 'gold' and 'goldm' contracts with expiries starting September 5. 

What boosted BSE shares?

After the market hours on Wednesday, BSE staged a strong financial performance in the first quarter of the current financial year.

BSE clocked a 149 per cent year-on-year jump in revenue to record Rs 674 crore for the quarter ended June 30, while its net profit grew more than 3.5 times to Rs 265 crore. 

Its quarterly operating earnings before interest, taxes, depreciation and amortisation (EBTIDA) increased more than four times to Rs 284 crore. 

BSE’s margin - a key measure of profitability – stood at 47 per cent, marking an improvement of 1,400 bps on a year-on-year basis, according to a release. 

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