Madhu Kannan, chief executive officer of Asia’s oldest bourse BSE Ltd. (SENSEX), will join Tata Sons Ltd. as business development head after his term ends in May.
In his new role, Kannan, 38, will report to Tata Sons’ chairman-designate Cyrus P. Mistry, India’s biggest business group said yesterday in an e-mailed statement. Kannan, who joined the exchange in 2009, will work with BSE’s board to ensure “seamless succession,” the bourse said in a statement.
BSE, founded in 1875 as the Bombay Stock Exchange, has lost ground to Goldman Sachs Group Inc.-backed National Stock Exchange (NIFTY) of India Ltd., which handles twice BSE’s volume. BSE, partly owned by Deutsche Boerse AG (DB1), had 264 million shares traded daily on average in the past year, or less than half the 649 million shares on the NSE. Average daily turnover in derivatives in the past month on the BSE was 2 percent of the NSE’s $24 billion, data compiled by Bloomberg show. The two bourses began trading equity futures in 2000.
“The BSE had lost its prime positioning,” U.R. Bhat, managing director of Dalton Capital Advisors India Pvt., said by phone from Mumbai. “He was taking some steps to redeem the exchange. Let’s see if they can find someone to continue the good work.”
Kannan initiated steps such as a derivatives incentive program for brokers that raised the value of open contracts on the exchange more than 3,000-fold in an effort to narrow the gap with its larger rival. The BSE had also formed an alliance with bourses in Brazil, Russia, Hong Kong and South Africa for cross- listing of futures based on each others benchmark indexes.
More competition for BSE is expected with MCX Stock Exchange Ltd. awaiting approval from regulators to start India’s third national bourse.
Kannan previously worked at Bank of America-Merrill Lynch as a managing director for global strategy. Before that he was a senior vice president in the global corporate client group at NYSE Euronext, in charge of the Asian, Middle Eastern and North African markets.
He declined to comment on when he will join Tata Sons.
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