1 / 16

Growth In Indian Commodity Market

47% of GDP is Commodity related <br>23% of GDP is from Agriculture

niasharma
Télécharger la présentation

Growth In Indian Commodity Market

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Growth In Indian Commodity Market

  2. Why Commodity Exchange in India • 47% of GDP is Commodity related • 23% of GDP is from Agriculture • Over 65% of 1 trillion population depend on agriculture directly • Over 7500 physical market yards with best Silver MCX tips • History of more than 150 years of derivatives trading

  3. Why Commodity Exchange in India • Largest producer / consumer of: • Bullion • Oilseeds • Pulses • Sugar • Cotton • Spices • Economy growing at the rate of 8%

  4. Evolution of Commodity markets in India • Ban in forward trading from mid-sixties • Prior to ban • Thriving commodity exchanges for cotton, gold, edible oils etc. • more than 20 regional commodity specific exchanges • Recent developments • Ban completely lifted in 2003 • Emergence of national level de-mutualised online multi-commodity exchanges • 3 National and 21 regional exchanges • Trade in 60 commodities compared with just 8 in 2000 • Growth exceeds 4 times in FY05 over FY04 Traded volume in 2004-05 around 20% of India’s GDP

  5. Growth in volumes of Indian Commodity Exchanges Rs bn 1 USD = Rs 43 Impressive growth of 341 % between 2003-04 to 2004-05

  6. Choice of Product: Calculator • Parameters considered • Price volatility • Share in GDP • Correlation with global markets • Share in external trade • Government intervention • Warehousing facilities • Traders distribution • Geographical spread • Number of varieties Only Physical commodities allowed in Commodity Exchanges

  7. Contract Specifications • Rigorous Product Research • Linking entire value chain • Underlying specifications identification • Proxies- Benchmarking to all other varieties • Identification of location basis • Location premium & discount • Grade premium & discount

  8. Challenges ahead • From open outcry to online • Discipline trading environment • Nuances of Physical settlement • Educating about free commodity tips • To bring actual users on the exchange platform • Farmers • Corporate • Investors

  9. Generating liquidity • Involvement of all value-chain entities in contract formulation • Relationship group provides relentless momentum • Generates interests of all members & clients • Awareness Programmes • Wide media coverage • Easy access to Exchange information • Market to be opened up for banks, fund houses and Foreign Investors

  10. Foreign Access • Foreign access permitted in securities market- equities & bonds • Foreign investment regulation for investment in commodity derivatives – a committee constituted by the regulator • Currently can access by setting up a domestic entity – for broking & investment

  11. Options trading • Options allowed in securities market • Single Stock options • Index Options • Interest rate Options • Currency Options • Options not yet permitted in the commodity markets • Law to be amended shortly • Informal options trading prevalent

  12. Regulatory Environment • Separate regulator for capital markets & commodity markets • Capital Markets • Securities Exchange Board of India (SEBI) • Autonomous body • Under Ministry of Finance • Commodity Markets • Forward Markets Commission (FMC) • Part of Ministry of Consumer Affairs • Law being amended to make it autonomous body

  13. About NCDEX

  14. NCDEX – Current shareholders 15% 15% 12% 12% 15% 15% 8% 8%

  15. Product Calendar Apr-Dec 2004 Jan – Jun 2005 In pipeline Dec 2003 Gold, Silver, Crude Palm oil, RBD Palmolein, Cotton, Mustard seed, Mustard oil Soybean, Refined soy oil Guar seed, Jute sacking, Chana, Rubber, Pepper, Wheat, Castor seed, Guar gum, Raw jute, Urad, Yellow peas, Sugar, Turmeric, Soymeal Gur, Rice, Maize, Raw silk, Cocoon, Jeera, Chilli, Steel, Cashew, Cottonseed oilcake, Sesame seed, Tur, Arabica & Robusta Coffee, Copper Cathode Other base Metals, Energy Products, More Agricultural products Indices- NCDEXAGRI FUTEXAGRI NCDEXRAIN Each product is selected after an in-depth research & market feedback

  16. Average daily volumes Rs mn Peak Volume for a single day Rs. 47200 mn on Jul ‘05 Impressive growth of NCDEX with 85% volume contribution from agriculture Volumes in Steel & Copper picking up- daily average steel trade- 10,000 tonnes

More Related