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The Government move to allow 49 per cent foreign direct investment in commodity exchanges through the automatic route may have little impact on the exchanges. Dilip Bhatia, Chief Executive Officer, Ace Commodity Exchange, said the move is welcome at the time when the exchanges are eager to adopt best technology from foreign players. However, he said, the exchanges can attract more investment if Government increases the individual FDI limit from the current five per cent.
Navin Mathur, Associate Director, Angel Broking, said the turnover on commodity exchanges are down 35-40 per cent in last 15 days after implementation of commodity transaction tax.
“There are several barriers in the commodity trade at present. To attract foreign investment in commodity exchange which is tightly controlled by the Government is going to be a big challenge for the exchanges,” he added. Shares of MCX jumped six per cent to Rs 744 following the Government announcement. However, it shed much of its gain to close with a gain of 3 per cent at Rs 725.
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