By Ashutosh Joshi
MUMBAI--India's National Stock Exchange Ltd. said Ravi Narain,
its managing director and chief executive of 12 years, will leave
the posts at the end of March and will be replaced by current Joint
Managing Director Chitra Ramkrishna.
Mr. Narain has expressed his inability to extend his tenure that
ends March 31, the operator of India's largest stock exchange by
market share said in a late-Monday statement. He will stay on the
company's board as its vice chairman in non-executive capacity, it
added.
Ms. Ramkrishna, who has been with the exchange since its
inception in 1992, is taking over as the top NSE executive at a
time when Indian stock exchanges are facing challenges such as
falling participation by retail customers and issues related to the
regulation of high-frequency trading. There have also been a few
incidents of trading disruptions.
Competition is also expected to increase in the equities trading
market--currently shared mostly between the National Stock Exchange
and the Bombay Stock Exchange--when the MCX Stock Exchange starts
operations in the next few months. The new exchange, founded by
Multi Commodity Exchange of India Ltd., recently conducted mock
sessions for its members.
The management change comes also amid NSE's plan to seek a
public listing of its shares.
In October, Mr. Narain told Dow Jones Newswires that the company
has initiated a process to segregate the commercial and regulatory
sides of its businesses--one of the requirements the Securities and
Exchange Board of India has recently set for exchanges to list
their shares.
It, however, hasn't fixed any deadline for the listing.
The exchange, which counts Goldman Sachs Group Inc. (GS) and
Morgan Stanley (MS) as shareholders, has a market share of about
70% in equity trading and a similar share in futures and options in
India.
The Bombay Stock Exchange, operated by BSE Ltd., is the oldest
stock exchange in Asia.
Deena Mehta, a former president of BSE, said attracting more
retail customers has been a major challenge for all exchanges in
the country. "How do we have more and more retail participants in
the markets--that is the key agenda for her (Ms. Ramkrishna) and
everyone," she added.
Indian shares have been among the top performers in the
Asian-Pacific region this year, rising about 20%. The rally has
been fuelled by inflows from foreign investors, who have bought
stocks worth about $19 billion this year.
However, retail participation has been waning.
On the NSE, the average daily volume of cash trading, a
significant part of which by individual investors, has fallen to
114.2 billion rupees ($2.05 billion) in October this year, from
183.7 billion in October 2008.
Write to Ashutosh Joshi at ashutosh.joshi@dowjones.com
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