3 weeks ago
MCX shares up 3% after SEBI proposal; brokerages see upside
MCX is a special kind of company called a commodity exchange.
It is the only company like this in India that is listed on the stock market.
A commodity exchange is a place where people buy and sell things like metals and other raw materials.
Recently, a group called SEBI made a proposal that could change how foreign investors take part in this trading.
After this news, MCX's shares went up by 3%.
Big money experts at Jefferies, Morgan Stanley, and JPMorgan think the move could help MCX make more money.
One expert says one change could add about 3% to MCX's profits, and another could add 10%.
Morgan Stanley says the proposal is a positive step for the market.
Three big banks have set high target prices for MCX's shares.
The experts do warn that bad regulatory changes or a drop in trading could be risks.
MCX shares rose 3% after SEBI's proposal, which analysts say could lift earnings at India's only listed pure-play commodity derivatives exchange.
Jefferies analyst Supratim Datta said FPI participation in cash-settled commodity F&O is currently 5-6%, and similar participation in non-cash-settled, non-agricultural contracts could add about 3% to MCX's PAT.
Datta estimated that deepening commodity index options (Bulldex/Metldex), which currently have no volumes, could add 10% to PAT should they become 10% of monthly equity ADTO within 3 years.
Jefferies has a buy rating on MCX with a target price of Rs 3,600, while Morgan Stanley has an 'Overweight' rating with a target of Rs 3,665, based on 40 times March 2028 EPS estimates.
Morgan Stanley called SEBI's proposal a positive step, expecting MCX to trade at a 20% premium to its historical average, and JPMorgan set a target of Rs 3,500.
- Who
- MCX, India's only listed pure-play commodity derivatives exchange, along with Jefferies analyst Supratim Datta and brokerages Morgan Stanley and JPMorgan.
- What
- MCX shares rose 3% after SEBI's proposal, with analysts issuing bullish ratings and higher target prices on the exchange.
- Where
- India, where MCX operates as the country's only listed pure-play commodity derivatives exchange.
- When
- Not specified beyond 'today'; the article reports a same-day 3% rise in MCX shares.
- Why
- Analysts believe SEBI's proposal could lift MCX's earnings by expanding foreign (FPI) participation in commodity derivative contracts.
Key facts
- Stock movement
- MCX shares up 3%
- Company
- MCX - India's only listed pure-play commodity derivatives exchange
- Current FPI participation (cash-settled commodity F&O)
- 5-6%
- Potential PAT impact - non-cash-settled, non-agricultural commodity contracts
- +3%
- Potential PAT impact - index options (Bulldex/Metldex)
- +10% if they reach 10% of monthly equity ADTO in 3 years
- Jefferies rating and target
- Buy; Rs 3,600
- Morgan Stanley rating and target
- Overweight; Rs 3,665 (40x March 2028 EPS estimate)
- JPMorgan target
- Rs 3,500
Quotes
Supratim Datta
Jefferies analyst
“"The deepening of commodity index options (Bulldex/Metldex), which currently has no volumes could add 10 per cent to PAT, should they become 10 per cent of monthly equity ADTO in 3 years."”
businesstoday.in
Morgan Stanley representative
Morgan Stanley analyst
“"SEBI’s proposal is a positive step for the market and expects MCX to trade at a 20 per cent premium to its historical average, supported by strong trading turnover in recent months."”
businesstoday.in
Sources
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