One 783Ngupta

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Information about One 783Ngupta

Published on January 4, 2008

Author: Alien


Slide2:  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 History of more than 150 years of derivatives trading Why Commodity Exchange in India Why Commodity Exchange in India:  Why Commodity Exchange in India Largest producer / consumer of: Bullion Oilseeds Pulses Sugar Cotton Spices Economy growing at the rate of 8% Evolution of Commodity markets in India:  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 Growth in volumes of Indian Commodity Exchanges:  Growth in volumes of Indian Commodity Exchanges Rs bn Impressive growth of 341 % between 2003-04 to 2004-05 1 USD = Rs 43 Choice of Product: Calculator:  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 Contract Specifications:  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 Challenges ahead:  Challenges ahead From open outcry to online Discipline trading environment Nuances of Physical settlement Educating about commercial relevance To bring actual users on the exchange platform Farmers Corporate Investors Generating liquidity :  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 Foreign Access:  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 Options trading:  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 Regulatory Environment:  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 About NCDEX:  About NCDEX NCDEX – Current shareholders:  NCDEX – Current shareholders 15% 8% 15% 15% 12% 15% 12% 8% Slide15:  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 Dec 2003 Apr-Dec 2004 Jan – Jun 2005 Other base Metals, Energy Products, More Agricultural products In pipeline Product Calendar Each product is selected after an in-depth research & market feedback Average daily volumes:  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 Question & Answers:  Question & Answers Thank You:  Thank You

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