MCX opens new year session on sedate note; know why it can flourish or decline in 2024

MCX Share Price: Multi Commodity Exchange of India (MCX) shares started the new year on a sedate note as they over one per cent on BSE on Monday (January 1, 2024). 

The MCX stock ended the trading session on Monday by 1.00 per cent lower, or Rs 32.00, at Rs 3166.20.

As the MCX stock closed lower in the first session of the year, here the Zee Business research team gives reasons why it can scale new heights and plumb new depths in the rest of the year.

Why MCX stock can go higher?

The company's long-standing problem of software was resolved in 2023 and the exchange's operations have improved because of the upgraded software system. 

As a result of which, margins and profits of MCX are likely to improve further.

With more investors flocking to the stock market in the booming economy, MCX will benefit due to the increasing stock market culture in the country.

Commodity prices are rising, so the company is likely to get the benefit of them. 

A lot of brokerage houses had a negative view of the exchange when it was facing software problems, but with the problem resolved, many of them have taken a U turn. UBS had given a target of Rs 3000.

Why MCX stock can go lower

The company's software problems have ended, but the it will have to pay the payments till December.

MCX is also facing stiff competition due to the entry of other exchanges into the commodity exchange segment.

There was a 21.6 per cent decline in MCX's future ADT in the second quarter.

There is an increase in options only because of energy contracts. 

Product concentration is high risk, which doesn't bodes well for the exchange.

Despite the company's many problems resolved in 2023, some brokerage houses are still worried about the company's future due to uncertainty about business.

Morgan Stanley's target for the share is Rs 2070.