Financial Tech falls 20%, recovers dramatically on NSEL payout deal

Financial Technologies and FT-promoted Multi Commodity Exchange (MCX) extended losses on Monday, following the carnage seen in these stocks last week. Financial Technologies fell 20 per cent at the start, but witnessed a sharp recovery, bouncing back into the green.

Financial Technologies traded 7 per cent higher at Rs 157.60 on the BSE as of 09.20 a.m. The stock had earlier hit a low of Rs 121 and a high of Rs 158.60. Financial Technologies crashed 73 per cent last week after its subsidiary National Spot Exchange Ltd (NSEL) suspended trading in most forward contracts on Wednesday. (Track stock)

"Some corrective steps have been taken by NSEL. Only when payouts start taking place, you will see some stability in the stock. The formula has been worked out, so the markets are a little bit more confident, but these stocks will start performing only when the payouts begin," Deven Choksey, managing director of KR Choksey told NDTV.

NSEL on Sunday said most of its trading members had proposed settling outstanding contracts over several months after the commodity exchange suspended trading in most forward contracts.

Thirteen members would pay five per cent of their outstanding obligations, a total of Rs 3,107 crore, weekly, and eight members, with contracts amounting to Rs 2,180 crore, would settle outright.

NSEL said it had yet to reach agreement with three of its members with outstanding obligations of Rs 310 crore.

The agreement between trading members and representatives of the regulatory body, Forward Markets Commission (FMC), followed meetings on Sunday, NSEL said.  
Counterparties needed to agree the proposals, a spokesman said.

NSEL said on Sunday it stands ready to ensure trading members settle outstanding contracts. The government asked NSEL on Thursday to detail its plan after the trading suspension, which the exchange said was due to a drop in volumes.

Multi Commodity Exchange (MCX) shares, however, were locked down in lower circuit, falling 10 per cent.

(With inputs from Reuters)