Published on February 19, 2008
MCX – A preferred platform for hedging & investment: MCX – A preferred platform for hedging & investment Joseph Massey Deputy Managing Director MCX – An Overview : MCX – An Overview Demutualised, Independent & Electronic (Commenced Nov 10, ‘03) No. 1 Commodity Exchange of India with around 72% market share in 2007 USD $2bn daily average trading volume in over 60 commodities Operations from over 600 cities with over 1700 members & 12,000+ Trading stations 9 International Strategic Alliances Only Commodity Exchange in the world to have ISO/IEC 27001:2005 certification First Indian Commodity Exchange to become Associate Member of Futures Industry Association Among the leading commodity exchanges globally in less than three years No.1 in Silver futures trading globally No.2 in Natural Gas & Copper futures trading globally No.3 in Gold & Crude Oil futures trading globally MCX Shareholders & Alliances: MCX Shareholders & Alliances Cross-border Strategic Alliances MCX Annual Growth: MCX Annual Growth 574% 220% Growth Comparison of Commodity Markets with Indian Equity Derivatives Market: Growth Comparison of Commodity Markets with Indian Equity Derivatives Market Market Share of MCX of the Total Indian Commodity Market Turnover : Market Share of MCX of the Total Indian Commodity Market Turnover Market share of MCX has increased by 24% Share of Agri, Energy & Metals of the Total MCX Volume in Contracts Traded (2006): Share of Agri, Energy & Metals of the Total MCX Volume in Contracts Traded (2006) Market share of MCX in Key Commodities (Jan-Dec 2006): Market share of MCX in Key Commodities (Jan-Dec 2006) Correlation with Global Prices – Gold, Silver, Copper and Crude Oil: Correlation with Global Prices – Gold, Silver, Copper and Crude Oil Extended trade timing ensures that stakeholders can manage price risk without lag & participate in the global price discovery process Gold Correlation (COMEX): 98.84% Silver Correlation (COMEX): 99.4% Copper Correlation (COMEX): 99.23% Crude Oil: MCX & NYMEX Crude Oil (NYMEX): 97.9% Impact of Commodity Prices on Stocks: Impact of Commodity Prices on Stocks Relationship between Crude Prices and Energy Company Share Prices Users of Commodity Futures of MCX: Users of Commodity Futures of MCX Retail Investors Wholesalers Corporates Farmers Traders Other Participants in the Value Chain Utility of Commodity Futures for Retails Investors: Utility of Commodity Futures for Retails Investors Get handsome returns by taking moderate risk in the commodity market Diversify portfolio risk by having assets typically with negative correlation Ride the commodity price cycle as an informed investor Get assured returns through cash & carry arbitrage and spreads Get assured returns through inter-market arbitrage Hedge against inflation which effects all asset classes MCX Commodities - Contracts: MCX Commodities - Contracts Future Opportunities: New Risk Management Instruments – Options, EFPs New Product Lines – Electricity, Coal, Carbon Credits Large unregulated market still untapped Proposal to allow Banks, MFs, Pension Funds, FII& NRIs in commodity exchanges Fully convertible currency would enable Indian traders to trade in global markets Intangibles to be allowed: Indices on Commodities, Rainfall, Temperature, Shipping Freight, Road Freight & Real Estate Index Future Opportunities Slide15: Thank You! Contact: 102 A , Landmark Suren Road, Chakala Andheri (East) Mumbai 400 093. Tel: +91-22 - 6709 9300 Fax :+91-22 - 6709 9044 Web : www.mcxindia.com DISCLAIMER:The Information in the presentation is solely for informational purpose and should not be regarded as a recommendation by MCX. All information in the presentation is obtained from the sources believed to be reliable and MCX or any of the associate entities make no representation as to its completeness or accuracy.MCX accepts no obligation to correct or update the information or opinion.No member of MCX or its associate entities accept any liability whatsoever consequent ional or other loses arising from the use of the presentation and or further communication in relation to this presentation.
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