Shares of Multi Commodity Exchange (MCX) on June 23 plunged after the company cancelled mock session for new trading platform a day ago, according to a report by CNBC TV-18, which raises several question on its plan to complete transition to new platform by month-end.
This cancellation comes amid a tight deadline the exchange is facing. MCX’s tech platform deal with 63 moons to maintain its trading platform expires this month. The deal was supposed to end last year but has been extended several time as MCX has failed to complete its work on an alternative.
63 Moons Technologies is the software services provider to MCX.
As of 11.22 am, MCX traded down 3 percent at Rs 1568 on BSE. Meanwhile, shares of 63 Moons jumped nearly 5 percent to Rs 177 apiece.
The software support and maintenance agreement between 63 moons technologies and MCX, which was last amended on 27 September 2014, ended on 30 September 2022. However, following that MCX was forced to extend the service period multiple times starting with the first extension of three months.
“Technology transition remains the key focus area for MCX and it has conducted several mock trading sessions in the last few months. The management is confident of completing the technology shift by
June 23,” notes analysts at HDFC Securities in a note in May. “However, we (believe) that the shift will be delayed by at least one quarter.”
“Delay in launch of new platform acts as an overhang (on the stock),” said Kajal Gandhi, Research Analyst at ICICI direct.
However, both brokers have a ‘BUY’ rating on the stock as they see several growth levers.
“Robust traction in options volume expected to continue. Launch of several mini contracts will aid overall volume growth and revenues. New product launch/initiatives - electricity contracts, option gold contract to
drive valuation further,” Gandhi said.
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