Exchanges bear the brunt

The market downturn last year had not just left the investors sweating. The stock exchanges too had to suffer through a decline in turnover and volumes. The fall in the volume of trading activity was reflected in the decline in income from transaction charges. For the National Stock Exchange (NSE), this contributes 56% of total income, and it fell 23% in FY2008-09. The Bombay Stock Exchange’s (BSE) income from transaction charges fell 30%.

Last year also witnessed little action on the IPO front and this was reflected in the fall in book-building fees. NSE’s book-building fees fell 92% in FY2008-09 while BSE recorded an 86% decline. While NSE recorded a small drop in total income, BSE’s total income remained largely unchanged. This was mainly due to the fact that BSE had a larger cushion from income from investments and deposits. Income interest grew by a whopping 231% for BSE whereas for NSE it grew by 63%. BSE’s total income was also supported by income from other services, which grew 56%.

In line with the reduced trading activity, BSE recorded a significant reduction in expenditure. But the same did not hold true for NSE. While BSE’s total expenses fell 31%, NSE’s expenses grew 15% over the year. NSE’s expenses were higher on account of higher spend on employee and administration expenses.
– Debashis Basu with Sanket Dhanorkar  [email protected]

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