Low spot electricity prices drive the recovery of trading volume at IEX
MUMBAI : Shares of Indian Energy Exchange Ltd (IEX) have recovered quickly after the market sell-off in February and March. The stock is now down only 6% from its highs in January, riding an improvement in volumes on its electricity trading platform.
Volumes had declined 6.6% in April, but jumped 47% in May, on a year-on-year basis. The steep fall in electricity prices in the spot markets are attracting price sensitive buyers such as state electricity boards, whose financial health have worsened of late. Prices in the March-May period are at least one-fifth lower than the year-ago period. Prices are down about 28% so far this month, reflecting lower fuel costs and spare generation capacities.
“Merchant prices continue to remain subdued. To take advantage of this, discoms, seeking to rationalize costs, turned to exchanges, wherein volumes spurted,” Edelweiss Securities Ltd said in a note.
