FDI in Capital Markets

Arround the world a trend of consolidation can be seen in the stock and commodity exchanges arround the world. Just recently the Merchantile Exchange acquired the C-Boof(Chicago board fo trade). Also NASDAQ is trying out for a hostile takeover of LSE (London Stock Exchange) with valuations reaching as high as $ 5 billion.

Just yesterday Goldman and Sachs and NYSE showed their interest in acquiring the 5% each stake in NSE. National stock exchange has not formally declared anything regading this matter. Goldman and sachs already acquired a 5% stake in MCX, (multi commodity exchange).

The lawsforeign only 49% foriegn investment in stock exchages with a limit of 26% in case of FDI and 23% FII. Also no one investor can invindividuallyan 5% individualy, this last limitaion is placed by the SEBI any in future this could be relaxed.

All this means more funds and techniforeignport from foriegn player, which will make the exchanges more efficient. Also we are still long way to witness something like the LSE takeover or the Euronext tforeign, where a foriegn firms tried to gain control of regionally strong exchanges.