MCX Shares Tumble Nearly 9% As SEBI Halts Commodity Derivatives Platform Launch

Shares of Multi Commodity Exchange of India Ltd. fell nearly 9% after the Securities and Exchange Board of India advised the exchange to keep the proposed launch of the commodity derivatives platform in abeyance.

The exchange can continue to conduct the mock tests on the platform pending further directions in the matter from SEBI, according to an MCX circular.

This comes as Chennai Financial Markets and Accountability submitted a letter to the market regulator on the commodity derivatives platform. CFMA's writ petitions on the platform are pending before the Madras High Court for disposal.

SEBI has said that since the matter involves technical issues, the same would be discussed in the SEBI Technical Advisory Committee meeting, which would be held shortly. Meanwhile, the launch of the platform needs to be in abeyance. The exchange is ready and keen to go live as soon as permitted, it said in its circular.

On a quarter-to-date basis, the stock has gained 28%. This is a result of an increase in the average daily trading volumes of crude contracts on MCX in the September quarter, according to Morgan Stanley. The brokerage has maintained an "underweight" on the stock, with a target price of Rs 1,270 apiece.

There was a high concentration of about 77% of crude contracts traded on MCX during this September quarter of fiscal 2024, and thus it states that "it is difficult to predict the sustainability" of the stock movement, Morgan Stanley said in its Sept. 28 note.

Shares of the company fell as much as 8.74% to Rs 1,913.25 apiece before paring gains to trade 8.07% lower at Rs 1,927.40 apiece as of 9:34 a.m. This compares to a 0.16% advance in the NSE Nifty 50.

It has risen 24.25% on a year-to-date basis. Total traded volume so far in the day stood at 18 times its 30-day average. The relative strength index was at 61.

Of the nine analysts tracking the company, four maintain a 'buy' rating, two recommend a 'hold,' and three suggest a 'sell,' according to Bloomberg data. The average 12-month consensus price target implies a downside of 11.6%.