Wednesday, January 10, 2007

NYSE acquires stake in NSE, India

New York Stock Exchange along with Goldman Sachs and other foreign investors agreed to pick up a combined stake of 20% in India’s National Stock Exchange. The NYSE Group is buying a 5% stake for $115 million in cash, valuing the NSE at $2.3 billion. Goldman Sachs, General Atlantic and Softbank Asian Infrastructure Fund will also acquire 5% each. The deal is expected to close in the first quarter of 2007.

NSE will not get any proceeds from the transaction. Domestic shareholders including ICICI Bank, Industrial Finance Corp. of India, IL&FS Trust and Punjab National Bank sold some of their stake to the foreign players.

National Stock Exchange Managing Director Ravi Narain said of the deal: “As Indian businesses grow global, and the mindset of our customer base grows global, it’s inevitable that financial markets make plans to go in that direction.”

India’s stock indexes have risen sharply in the past year as investors poured money into companies, their confidence bolstered by strong economic growth of over 8%, the government’s move to increase foreign investment in several key sectors and growing consumer demand. The National Stock Exchange’s flagship Nifty 50 index crossed the 4,000 mark for the first time last month. In 2006, the average daily traded value in equities on the National Stock Exchange was around $2 billion and the notional average daily traded value in equity derivatives was around $7 billion.

It's another positive sign for Indian Stock Market. When more people trade, stock exchanges make all the money. Investors and traders either lose or win. Stock exchanges don't lose.

You can read the complete article here.

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