Foreign players pick up stake in BSE, NSE
By siliconindia   |   Friday, 09 March 2007, 18:30 IST
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BANGALORE: Riding on the recent policy announcement by the Government of India allowing 26 percent foreign ownership in the stock exchanges, the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) announced new foreign investments in the respective exchanges. While in the case of NSE, Morgan Stanley, Citigroup and Actis group have agreed to pick up a total of 6 percent for an undisclosed amount, the Singapore Stock Exchange picked up a strategic 5 percent stake in BSE, Asia?s oldest exchange, for Rs189 crore, or $42.7 million. Morgan Stanley, Citigroup and Actis group have entered into agreements to acquire 3 percent, 2 percent and 1 percent equity stake respectively in NSE from the following domestic Institutions viz., IDBI (2 percent), SBI (1.50 percent), SBI Capital Markets Limited (0.50 percent), Corporation Bank (0.265 percent), Union Bank of India (0.125 percent), Bank of Baroda (0.89 percent), Canara Bank (0.385 percent) and Oriental Bank of Commerce (0.335 percent). The investments follow the earlier agreements between NYSE, General Atlantic, Goldman Sachs and Softbank Asian Infrastructure Fund with IFCI, IL&FS, ICICI, PNB and GIC to acquire 5 percent equity stake each in NSE from the domestic Institutions. They paid US$460mn for stake totaling 20 percent in January, valuing NSE at US$2.5bn. Singapore Stock Exchange's (SGX) investment in BSE, on the other hand, comes on the heels of Frankfurt?s Deutsche Borse picking up a similar stake for the same price. "We expect this alliance to go well," said Hsieh Fu Hua, the chief executive of SGX, entered into a strategic alliance with another exchange for the first time. The deal was struck at Rs5,200 per share, the same rate at which Deutsche Borse bought their stake, valuing Asia's largest exchange at around US$900mn.

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