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Defunct stock exchanges of India: A journey cut short for Delhi Exchange, Calcutta Exchange, others

There were many prominent stock exchanges in India such as Delhi stock exchange (DSE), Calcutta stock exchange (CSE), and many more which were replaced by Bombay stock exchange (BSE) and National stock exchange (NSE) due to competition and a decline in trading volumes.

The National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE) are the mainstays of Indian equity markets; but over the years, several other exchanges have played their part in serving investors and traders. These exchanges, including the prominent regional ones such as The Delhi Stock Exchange (DSE) and Calcutta Stock Exchange (CSE) once played vital roles in their respective regions. However, due to various challenges and changing dynamics in the financial industry, these exchanges were discontinued.

Delhi Stock Exchange (DSE): The Delhi Stock Exchange was established in 1947, serving as a crucial platform for trading securities and providing liquidity to market participants in the Delhi region. It facilitated the trading of stocks, bonds, and other financial instruments. Securities and Exchange Board of India (SEBI) introduced reforms and stricter regulations to enhance transparency, investor protection, and market integrity. Compliance with these regulations posed significant challenges for smaller regional exchanges like DSE, making it difficult to sustain their operations. The emergence of national-level exchanges, such as the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), attracted market participants, including brokers, investors, and companies, away from regional exchanges like DSE, leading to a decline in trading volumes and overall market activity. This resulted in the discontinuation of the DSE in January 2017.

Calcutta Stock Exchange (CSE): The Calcutta Stock Exchange, established in 1908, was one of the oldest stock exchanges in India. It served as a significant financial hub in the eastern region, facilitating the trading of stocks, bonds, and other financial instruments. Similar to the Delhi Stock Exchange, the Calcutta Stock Exchange faced regulatory challenges imposed by SEBI. Compliance with these regulations, such as stringent reporting requirements, increased operational costs, and stricter governance norms, became difficult for regional exchanges like CSE. Over time, the Calcutta Stock Exchange experienced a decline in trading volumes. These factors made it challenging for CSE to maintain its operational viability, therefore CSE was directed by SEBI to suspend its trading operations in April, 2013.

Ahmedabad Stock Exchange (ASE): Founded in 1894, the Ahmedabad Stock Exchange served as a regional exchange in Gujarat. In 2014, ASE voluntarily exited the stock exchange business and transformed into a depository participant due to declining trading volumes and regulatory challenges.

Madras Stock Exchange (MSE): The Madras Stock Exchange, founded in 1937, operated as a regional exchange in South India. It facilitated the trading of equities, bonds, and other securities. However, with the advent of electronic trading and the emergence of national-level exchanges, MSE became defunct in 2015.

Cochin Stock Exchange (CSE): The Cochin Stock Exchange, established in 1978, catered to the trading needs of Kerala’s capital city, Kochi. However, due to low trading volumes and other operational challenges, CSE was derecognized by the Securities and Exchange Board of India (SEBI) in 2014.

Hyderabad Stock Exchange (HSE): The Hyderabad Stock Exchange, founded in 1941, operated as a regional exchange in Telangana and Andhra Pradesh. Despite its historical significance, HSE discontinued its trading operations in 2013 due to low liquidity and shifted to a corporate structure.

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HDFC-HDFC Bank merger to be effective from 1 July; HDFC shares will be delisted on 13 July

The merger of HDFC and HDFC Bank will be effective from 1 July.

HDFC and HDFC Bank’s merger will be effective from 1 July onwards. HDFC shares will stop trading and be delisted from the bourses on 13 July. Prior to the merger, both lenders will have a final board meeting each on 30 June, after office hours, to clear and approve the merger, said HDFC Bank Chairman Deepak Parekh. HDFC and HDFC Bank announced their merger plans last year, on 4 April. HDFC will obtain a 41% stake in HDFC Bank and the bank will be owned entirely by public shareholders. All HDFC’s subsidiaries will be moved under HDFC Bank’s banner.

HDFC-HDFC Bank merger to create a bigger behemoth

Experts project that following the amalgamation, the lending powerhouse will boast of an asset totaling Rs 18 lakh crore. The merged entity will be the second largest bank in India after SBI, and double the size of private lender ICICI Bank. “After 45 years in public finance, providing 9 million homes for Indians, we have to find a home for ourselves. And, we have found a home in our own family company HDFC Bank,” Deepak Parekh had said when plans for the merger were announced.

“The proposed transaction would create meaningful value for various stakeholders including respective shareholders, customers, employees, as the combined business would benefit from increased scale, comprehensive product offering, balance sheet resiliency, and the ability to drive synergies across revenue opportunities,” HDFC said in an exchange filing.

HDFC, HDFC Bank share price movement
HDFC Bank’s shares jumped 2.3% as Deepak Parekh and Keki Mistry announced the details of the merger at a press conference. Concurrently, HDFC stock price rose 2.6% to Rs 2,771 apiece. The combined market-capitalization of the HDFC twins came in at Rs 14.4 lakh crore based on Monday’s market closing price. However, with a market-cap of Rs 16.9 lakh crore, Reliance Industries will continue to hold its position as India’s largest company. HDFC shareholders will receive 42 shares of HDFC Bank for every 25 shares of the non-banking lender held by them.

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Fed Chair Powell continues to guide dollar; Pound, Yen, Yuan remain under pressure on central banks’ policies

Rupee traded in a narrow range and volatility remained low following no major cues on the domestic but global factors will continue to influence and it will be the move in the dollar index that will trigger volatility in the rupee.

By Gaurang Somaiya

Rupee traded in a narrow range and volatility remained low following no major cues on the domestic and global front. Earlier in the week, Chinese Yuan was weighed down after the PBoC announced a rate cut of two benchmark lending rates. Chinese yuan witnessed marginal selling pressure during the day after the PBoC announced a rate cut of two benchmark lending rates – its one-year and five-year loan prime rates – by 10 basis points each. The prime rate cuts, the first in 10 months, followed similar easing in other money rates last week but were less aggressive than some had hoped. Dollar rose in the latter half of the week following better-than-expected economic data from the US. Data showed housing data single family housing starts surged 21.7% in May against expectations. On the domestic front, no major cues are lined up but global factors will continue to influence, and it will be the move in the dollar index that will trigger volatility in the rupee. We expect the USDINR (Spot) to trade sideways and quote in the range of 81.80 and 82.50.

Volatility in the dollar remained elevated also on the back of the Fed Chairman’s testimony. The Fed Chairman in his testimony hinted towards further rate hikes. He reiterated the fact that the central bank remains “strongly committed to bringing inflation back down to our 2% goal,” and said it would be “a pretty good guess” that future rate hikes are in the cards if the economy continues on its current path. The Federal Reserve will likely raise interest rates at least once more this year because of persistently high inflation. This week, from the US, focus will be on the consumer confidence, trade balance, final GDP and core PCE index; better-than-expected economic data is likely to extend gains for the dollar and thereby keep the crosses weighed down.

Pound came under pressure after inflation in the UK came in at 8.7% in May as compared to estimates of 8.4%. Volatility in the pound was high after the Bank of England raised rates by 50bps. Earlier in the week, data showed inflation in the UK rose to 8.7% in May as compared to estimates of 8.3%. Policymakers in the UK are walking on a tightrope as they attempt to tighten monetary policy to quell inflationary pressures. Losses for the currency got extended after preliminary manufacturing and services PMI numbers from the UK came in weaker-than-estimates. This week, from the UK, the final GDP number will be important to watch and that is likely to provide cues to the pound that was weighed down in the last few sessions.

The Japanese Yen continues to remain under pressure as the dollar gained in the latter half of the week. The divergence between the Federal Reserve and the Bank of Japan policy is keeping the safe haven currency weighed down. We expect that momentum in the Yen is likely to remain weak and any further dovish outlook from the BOJ could keep the Yen under pressure.

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