The first thing that took me by surprise about my interview with Madhu Kannan, the CEO of the Bombay Stock Exchange (BSE) was the timing of our chat. “Can you be here by 8.25 am?” he asked. Sure, I replied and cameraman, Sanjiv, and I reached his plush office right on time.
It had taken around 3 months and an endless number of emails and phone calls to the BSE’s press office to confirm a date and time for our interview. It was frustrating to keep chasing them – I put it down to Indian bureaucracy and poor time management, unfortunately still typical of many large Indian companies.
“That’s one thing I am trying to change,” said Kannan when we interviewed him. “I want to start meetings on time and change the culture so no one’s late for meetings.”
It’s just one of the many, many challenges Kannan has ahead of him.
His big task: To revamp the BSE and make it relevant again.
At 37, he’s the youngest CEO of Asia’s oldest stock exchange. It’s an exchange that needs help.
While it had a virtual monopoly over stock trading in India, the entry of a rival exchange – the National Stock Exchange in the early 1990’s – changed that. The BSE now handles only a fraction of all trading done in India. To compete more efficiently, it needs to invest in better technology, says Kannan, who also has plans to make the BSE a one-stop shop for investors looking to trade across multiple platforms.
Sure, Kannan may get the BSE back on its feet. However, the real challenge for any stock exchange in India – be it the BSE or the NSE – is to get more people to invest in stocks. Only a tiny fraction –two percent of India’s billion strong population – dabbles in the share market. Those in rural areas still prefer to invest in tangible assets like gold.
Even if Kannan is able to win back customers who’ve switched to the NSE, convincing newcomers to try their hand at trading shares, say observers, could be key to the BSE’s success. Given the robust year the Indian stock market has had, it could well attract a bunch of new investors.
Kannan has already started the process of repositioning the BSE. He’s in the process of buying a technology firm, has cut transaction fees, and – oh yes – he starts all his meetings on time.
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