MCX Shares End 5% Higher After SEBI Chief Signals Non-Agri Commodity Segment Review

Shares of Multi Commodity Exchange of India Ltd. rose as high as 5.24% to reach an all-time high on Monday, in the backdrop of SEBI Chair Tuhin Kanta Pandey signalling a review of non-agricultural commodity derivatives segment.

Pandey said they are working with the Reserve Bank of India and the Insurance Regulatory and Development Authority of India (IRDAI) to enable the participation of banks and insurance companies in the commodity derivatives market.

While speaking at the 11th International Convention of the Commodity & Capital Participants Association of India on Saturday, Pandey also highlighted that SEBI is mulling the constitution of working group to review the non-agricultural commodity derivatives segment. 

"After due consultation with all stakeholders, we are going to form another working group to review the non-agricultural commodity derivative segment", he said, adding that the group will be notified very soon.

Further, soaring prices of precious and non-precious metals like silver, gold, platinum, and copper have contributed to the MCX rally. Gold futures rose to trade as high as Rs 1,36,180 per 10 gram, while silver surged to Rs 2,14,583 a kilogram.

The SEBI chief underscored that the commodities market will become more favourable for hedging if and when institutional participation is enhanced, since this will increase liquidity.

Pandey also informed that the market regulator has already instituted working groups to strengthen the agriculture and commodity derivatives ecosystem.

Among other things, these groups will examine whether or not existing regulatory framework governing margins, position limits, and delivery and settlement mechanisms can be optimised without compromising market integrity.

The scrip rose as much as 5.24% to Rs 10,847 apiece, the highest level ever. It pared gains to settle 4.95% higher at Rs 10,817, compared to 0.79% rise in the benchmark Nifty 50.

The stock has risen 78.29% on a year-to-date basis. Total traded volume so far in the day stood at 1.50 times its 30-day average. The relative strength index was at 45.39.

Out of 11 analysts tracking the company, five maintain a 'buy' rating, four recommend a 'hold,' and two suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies a potential downside of 6.6%.