MCX to Launch New Commodity Derivatives Platform on 16-October-2023

Multi Commodity Exchange of India (MCX) is set to introduce its new web based commodity derivatives platform (CDP) on October 16, following the recent approval from the Securities and Exchange Board of India (SEBI). This announcement comes after a temporary suspension of the platform's implementation due to technical concerns. 

MCX board had previously awarded the contract for the implementation of the Commodity Derivatives Platform to Tata Consultancy Services (TCS). However, the transition to TCS's software faced technical issues, leading to delays in its implementation. In response to the news, MCX's share price soared, marking a 52-week high of ₹2,158.90 per share on the Bombay Stock Exchange (BSE).

Mock Trading Sessions

To ensure a smooth transition, MCX has been conducting mock trading sessions for the new platform, and these sessions are scheduled to continue from October 10 to 12. These sessions aim to enable members to validate their setup and connections, ensuring readiness for the new platform's launch.

Key Dates:
•    October 10: MCX received SEBI's approval for the CDP.
•    October 15: A mock trading session is planned to allow members to prepare for the transition.
•    October 16: The new commodity derivatives platform will officially go live.

Changes for Members

Several key changes are in store for MCX members:

•    Members will be able to log in to the new front-end setup, including the new trading workstation (MCX Trade Station) and member admin terminal (Member Control Station) from October 14, 2023.
•    All pending orders, including Good 'Till Cancel (GTC) and Good 'Till Date (GTD) orders, as of the end of trading hours on October 13, 2023, will be canceled due to the new platform's release.
•    Pending Option Devolvement Intimations for CRUDEOIL OPTION 17OCT2023 contracts will not be carried forward to the new platform, and members must re-enter these intimations on the new platform.

Stock Performance 

MCX stock has shown impressive returns in recent periods. Over the last six months, it has delivered a 45% return to its investors. Looking at the past year, the stock has surged 63%. But when we broaden our analysis to the 5-year time frame, it becomes even more impressive, the stock has generated a staggering 189% return, showcasing its strong performance

Q1 Performance of MCX: In the first quarter of fiscal year 2023-24 (Q1FY24), MCX reported a 52.5% decline in its consolidated net profit, with earnings amounting to ₹19.66 crore, as compared to ₹41.46 crore in the same period the previous year.

On the positive side, the company's operating income saw an increase of 34%, reaching ₹146 crore compared to ₹109 crore in the corresponding year-ago period. Additionally, the average daily turnover (ADT) for futures and options surged by 26%, reaching ₹83,341 crore, compared to the previous quarter in fiscal year 2022-23 (Q4FY23).

In terms of client engagement, the company stated  a 12% growth in traded clients in the futures and options segment, with approximately 3.93 lakh clients during Q1 FY23-24, compared to 3.52 lakh in the previous quarter, Q4 FY22-23.

Conclusion

MCX's announcement of the launch date for its new commodity derivatives platform is a development for the largest commodity derivatives exchange in India. It marks the resolution of technical issues that caused delays and showcases the exchange's commitment to providing a robust trading platform. Members are encouraged to participate in mock trading sessions to ensure a smooth transition to the new platform on October 16, 2023. The surge in MCX's share price underscores the market's anticipation of this important milestone.