Shares of Multi Commodity Exchange of India Ltd (MCX) fell sharply in Friday’s trade after the commodity exchange again extended its software support contract with 63 Moons Technologies Ltd, the former promoter of the bourse. MCX and 63 Moons said that the contract has been extended for a period of six months starting July 1, 2023. MCX has repeatedly failed to switch to a new trading platform within stipulated deadlines. The stock today slumped 12.48 per cent to hit a day low of Rs 1,437 over its previous close of Rs 1,641.85. The contract has been renewed at a consideration of Rs 125 crore per quarter, which would be Rs 250 crore for a six-month tenure.
“We understand the importance of providing a reliable and robust platform to our users, and we are committed to continuously improving our services. We will communicate to all our stakeholders, about the roll-out plan to migrate to the new Commodity Derivatives platform,” MCX said.
On the other hand, 63 Moons, previously known as Financial Technologies India Ltd, said it has “once again agreed to the eleventh-hour request by MCX, which according to MCX is for the ‘last time’ for one more time.
“We sincerely wish that this ‘last time’ really happens someday, so that we deploy our excellent team of exchange technology engineering group in mega promising opportunity in the new digital world,” it added.
This is the third time that MCX approached 63 Moons to extend the software support service arrangement after the long-term arrangement with MCX ended on September 30, 2022, and MCX selected a new technology service provider way back in February 2021.
63 Moons further said it has been offering MCX since August 2020 an option to purchase the software source code for self-use which is in line with the practices adopted by all best exchanges in India as well as across the world.
In the last few weeks, MCX had to cancel several mock trading sessions which were aimed at checking the new trading platform. The technology support for MCX has been provided by 63 Moons, its erstwhile founder-promoter, ever since it started operations in November 2003.
However, Tata Consultancy Services (TCS) was selected as the vendor for the development of the new commodity derivative platform in February 2021. MCX and TCS have been working on developing a new platform and it initially expected to go live by July 2022. But both the companies have encountered several delays since then.
On the technical front, AR Ramachandran from Tips2trades said, “MCX now has strong support at Rs 1,395. Only if the daily resistance of Rs 1,499 is broken on a closing basis, investors should buy for better returns.”
MCX, the country’s first listed exchange, is a commodity derivatives exchange that facilitates online trading of commodity derivatives transactions.
Meanwhile, Indian equity benchmarks traded higher in early deals on Friday to touch their all-time high levels due to improved sentiment following robust economic data from the US, which eased fears of a slowdown. The domestic indices were up led by gains in technology, consumer durables, banks and financials.
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