Anil Agarwal's bulk purchase of 10.4% stake in Cairn India has renewed the battle of one upmanship between India's two premier bourses-Bombay Stock Exchange (BSE), Asia's oldest stock exchange, and National Stock Exchange (NSE), which, over the years, has cornered over 95% market share.
On Tuesday, when Petronas sold its 14.94% in Cairn India for about Rs 9,400 crore, it gave a huge boost to BSE's total turnover, with the day's final count at Rs 12,832 crore. This was also higher than the Rs 10,827 crore clocked by NSE. Usually, NSE clocks about four times BSE's turnover. Cheered by the eight-year high turnover, BSE sent out a release claiming that it was the result of various initiatives the bourse had taken to increase turnover. "(BSE's) market share at end of trading today, April 19, 2011, was 54%," the release claimed. It also listed several other initiatives that might have contributed to this rise in turnover.
The fact, however, remains that if one takes out the Rs 9,400-crore Cairn deal, the bourse's total turnover would be Rs 3,432 crore, about 20% lower than its last one year's average daily figure. Not used to taking things lying down, NSE reacted sharply and pointed out it was a result of a one-off block deal, which gave higher volumes to BSE in the cash segment. It pointed out that if one considered the cash and derivatives market turnover together, with a turnover of Rs 1.44 lakh crore, NSE still enjoyed a market share of 91%.
Although since mid-1990s till about 2007 the two exchanges had fought hard to gain market share and dominance in the trading space, of late the rivalry was muted with NSE gaining near-monopoly in terms of turnover. It needs to be seen if the day's flare up will be a one-off incident or the renewal of the old competition.
