Indian bourses make lower profits than most major global peers
Monday, 29 November 2010
NEW DELHI, Nov 28 (PTI): A regulatory panel may have voiced concerns over high profits being made by stock exchanges here, but Indian bourses figure among the least profitable entities when compared to their major global peers.
In a move that could make it difficult for corporate entities to set up stock exchanges, a Securities and Exchange Board of India (Sebi) committee last week recommended that bourses should be stopped from making huge profits and Sebi should put a cap on their profitability.
Industry sources, speaking on condition of anonymity, said the recommendations were good, given the regulatory role that bourses need to undertake, but go against the business philosophy of the entities running or willing to set up stock exchanges.
At the same time, an analysis of financials of leading stock exchanges across the world shows that the profits of Indian bourses are among the lowest. Industry experts said the recommendation to only allow Indian bourses to make reasonable profits looks odd, as their profits are low when compared to their global peers.
The country's largest bourse, the National Stock Exchange , reported a profit after tax of Rs 6.14 billion for the fiscal ended March, 2010, while its main rival, the BSE, posted a net profit of Rs 2.32 billion.
In comparison, at least eight major exchanges from across the world reported higher net profits for the financial year than either of the two Indian bourses.
These include the Singapore Exchange (SGX), Spanish bourse BME, Australia's ASX, Nasdaq and NYSE of the US, London Stock Exchange (LSE) and Hong Kong Exchange (HKeX).
Furthermore, the Bursa Malaysia, Johannesburg Stock Exchange (JSE) and Japan's Osaka Securities Exchange also reported higher profits than the BSE, but less than that of NSE.
While SGX's profits stood at Rs 11 billion, those of Nasdaq and NYSE Euronext stood at Rs 12.35 billion and Rs 24.35 billion, respectively. LSE earned a profit of Rs 6.53 billion during the year, while HKeX was among the most profitable at Rs 27.45 billion.
Among the others, Bursa Malaysia earned Rs 2.60 billion, BME raked in Rs 9.0 billion, ASX Rs 14.55 billion, JSE Rs 2.38 bilion and Osaka Securities Exchange made a profit of Rs 3.43 billion.
The profits could not be ascertained for two leading Chinese exchanges, the Shanghai Stock Exchange and Shenzhen Stock Exchange.
In a move that could make it difficult for corporate entities to set up stock exchanges, a Securities and Exchange Board of India (Sebi) committee last week recommended that bourses should be stopped from making huge profits and Sebi should put a cap on their profitability.
Industry sources, speaking on condition of anonymity, said the recommendations were good, given the regulatory role that bourses need to undertake, but go against the business philosophy of the entities running or willing to set up stock exchanges.
At the same time, an analysis of financials of leading stock exchanges across the world shows that the profits of Indian bourses are among the lowest. Industry experts said the recommendation to only allow Indian bourses to make reasonable profits looks odd, as their profits are low when compared to their global peers.
The country's largest bourse, the National Stock Exchange , reported a profit after tax of Rs 6.14 billion for the fiscal ended March, 2010, while its main rival, the BSE, posted a net profit of Rs 2.32 billion.
In comparison, at least eight major exchanges from across the world reported higher net profits for the financial year than either of the two Indian bourses.
These include the Singapore Exchange (SGX), Spanish bourse BME, Australia's ASX, Nasdaq and NYSE of the US, London Stock Exchange (LSE) and Hong Kong Exchange (HKeX).
Furthermore, the Bursa Malaysia, Johannesburg Stock Exchange (JSE) and Japan's Osaka Securities Exchange also reported higher profits than the BSE, but less than that of NSE.
While SGX's profits stood at Rs 11 billion, those of Nasdaq and NYSE Euronext stood at Rs 12.35 billion and Rs 24.35 billion, respectively. LSE earned a profit of Rs 6.53 billion during the year, while HKeX was among the most profitable at Rs 27.45 billion.
Among the others, Bursa Malaysia earned Rs 2.60 billion, BME raked in Rs 9.0 billion, ASX Rs 14.55 billion, JSE Rs 2.38 bilion and Osaka Securities Exchange made a profit of Rs 3.43 billion.
The profits could not be ascertained for two leading Chinese exchanges, the Shanghai Stock Exchange and Shenzhen Stock Exchange.