Professional Documents
Culture Documents
INTRODUCTION
Commodity Futures:
Any product that can be used for commerce or an article of commerce which is
traded on an authorized commodity exchange is known as commodity. The article
should be movable of value, something which is bought or sold and which is
produced or used as the subject or barter or sale. In short commodity includes all
kinds of goods. Forward Contracts (Regulation) Act (FCRA), 1952 defines “goods”
as “every kind of movable property other than actionable claims, money and
securities”.
Commodity futures are still a relatively unknown asset class, despite being
traded in the India for over 3 years. This may be because commodity futures are
strikingly different from stocks, bonds, and other conventional assets. Among
these differences are: (1) commodity futures are derivative securities; they are not
claims on long-lived corporations; (2) they are short maturity claims on real
assets; (3) unlike financial assets, many commodities have pronounced
seasonality in price levels and volatilities.
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The economic function of corporate securities such as stocks and bonds, that is,
liabilities of firms, is to raise external resources for the firm. Investors are bearing
the risk that the future cash flows of the firm may be low and may occur
during bad times, like recessions. These claims represent the discounted
value of cash flows over very long horizons. Their value depends on decisions
of management. Investors are compensated for these risks. Commodity futures
are quite different; they do not raise resources for firms to invest. Rather,
commodity futures allow firms to obtain insurance for the future value of their
outputs (or inputs). Investors in commodity futures receive compensation for
bearing the risk of short-term commodity price fluctuations.
Commodity Trading:
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Commodity futures contract:
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History of the commodity market:
In India, the futures market for commodities evolved by the setting up of the
“Bombay Cotton Trade Association Ltd.”, in 1875.A separate association by the
name "Bombay Cotton Exchange Ltd” was established following widespread
discontent amongst leading cotton mill owners and merchants over the functioning
of the Bombay Cotton Trade Association. With the setting up of the ‘Gujarati
Vyapari Mandali” in 1900, the futures trading in oilseed began. Commodities like
groundnut, castor seed and cotton etc began to be exchanged. Raw jute and jute
goods began to be traded in Calcutta with the establishment of the” Calcutta
Hessian Exchange Ltd” in 1919. The most notable centers for existence of futures
market for wheat were the Chamber of Commerce at Hapur, which was
established in 1913. Other markets were located at Amritsar, Moga, Ludhiana,
Jalandhar, Fazilka, Dhuri, Barnala and Bhatinda in Punjab and Muzaffarnagar,
Chandausi, Meerut, Saharanpur, Hathras, Gaziabad, Sikenderabad and Barbell in
U.P. The Bullion Futures market began in Bombay in 1990.
After the economic reforms in 1991 and the trade liberalization, the Govt. of India
appointed in June 1993 one more committee on Forward Markets under
Chairmanship of Prof. K.N. Kabra. The Committee recommended that futures
trading be introduced in basmati rice, cotton, raw jute and jute goods, groundnut,
rapeseed/mustard seed, cottonseed, sesame seed, sunflower seed, safflower
seed, copra and soybean, and oils and oilcakes of all of them, rice bran oil, castor
oil and its oilcake, linseed, silver and onions.
All over the world commodity trade forms the major backbone of the economy. In
India, trading volumes in the commodity market have also seen a steady rise - to
Rs 5, 71,000 crores in FY05 from Rs 1, 29,000 crores in FY04. In the current fiscal
year, trading volumes in the commodity market have already crossed Rs 3, 50,000
crores in the first four months of trading.
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Some of the commodities traded in India include Agricultural Commodities like
Rice Wheat, Soya, Groundnut, Tea, Coffee, Jute, Rubber, Spices, Cotton,
Precious Metals like Gold & Silver, Base Metals like Iron Ore, Aluminum, Nickel,
Lead, Zinc and Energy Commodities like crude oil, coal. Commodities form around
50% of the Indian GDP. Though there are no institutions or banks in commodity
exchanges, as yet, the market for commodities is bigger than the market for
securities.
Derivatives:
Commodities whose value is derived from the price of some underlying asset like
securities, commodities, bullion, currency, interest level, stock market index or
anything else are known as “Derivatives”. In simpler form, derivatives are financial
security such as an option or future whose value is derived in part from the value
and characteristics of another security, the underlying asset.
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‘Futures’ and ‘options’ are two commodity traded types of derivatives. An ‘options’
contract gives the owner the right to buy or sell an asset at a set price on or before
a given date. On the other hand the owner of a ‘futures’ contract is obligated to
buy or sell the asset.
The other examples of derivatives are warrants and convertible bonds (similar to
shares in that they are assets). But derivatives are usually contracts. Beyond this,
the derivatives range is only limited by the imagination of investment banks. It is
likely that any person who has funds invested an insurance policy or a pension
fund, which they are investing in, and exposed to, derivatives – wittingly or
unwittingly.
Shares or bonds are financial assets where one can claim on another person or
corporation; they will be usually being fairly standardized and governed by the
property of securities laws in an appropriate country. On the other hand, a contract
is merely an agreement between two parties, where the contract details may not
be standardized. Derivatives securities or derivatives products are in real terms
contracts rather than solid as it fairly sounds.
Commodity Derivatives:
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Commodity Trading Exchanges in India:
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National Commodity & Derivatives Exchange Limited (NCDEX):
NCDEX is a public limited company incorporated on April 23, 2003 under the
Companies Act, 1956. It has commenced its operations on December 15, 2003.
National Commodity & Derivatives Exchange Limited (NCDEX) is a professionally
managed online multi commodity exchange promoted by ICICI Bank Limited (ICICI
Bank), Life Insurance Corporation of India (LIC), National Bank for Agriculture and
Rural Development (NABARD) and National Stock Exchange of India Limited
(NSE).
NCDEX is located in Mumbai and offers facilities to its members in more than 390
centers throughout India. The reach will gradually be expanded to more centers.
NCDEX is the only commodity exchange in the country promoted by national level
institutions. NCDEX is a nation-level, technology driven on-line commodity
exchange with an independent Board of Directors and professionals not having
any vested interest in commodity markets.
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Currently NCDEX has 700 members at 470 locations across the country. The
exchange saw 400% growth in the first year of its operations and expects 200% in
the second year also. According to the latest news NCDEX plans to roll out more
contracts like contracts in nickel, tin and mentha oil.
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announced their strategic participation in the equity of MCX on June 15, 2005.
This new partnership of NSE and NABARD with MCX makes MCX consortium the
largest distribution network across the country.
MCX is the only Exchange which has got three international tie-ups which is with
Tokyo Commodity Exchange (TOCOM), the 250 year old Baltic Freight Exchange,
London, Dubai Metals & Commodity Centre (DMCC) & Dubai Gold & Commodity
Exchange (DGCX), the strategic initiative of Government of Dubai. MCX has to its
credit, setting up of the National spot exchange (NSEAP), which connects all India
APMC markets thereby contributing in the implementation of Government of
India’s vision to create a common Indian market.
The trading system of MCX is state-of-the-art, new generation trading platform that
permits extremely cost effective operations at much greater efficiency. The
Exchange Central System is located in Mumbai, which maintains the Central
Order Book. Exchange Members located across the country are connected to the
central system through VSAT or any other mode of communication as may be
decided by the Exchange from time to time. The controls in the system are system
driven requiring minimum human intervention. The Exchange Members places
orders through the Traders Work Station (TWS) of the Member linked to the
Exchange, which matches on the Central System and sends a confirmation back
to the Members.
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Settlement: Exchange maintains electronic interface with its Clearing Bank. All
Members of the Exchange are having their Exchange operations account with the
Clearing Bank. All debits and credits are affected electronically through such
accounts only. All contracts on maturity are for delivery. MCX specifies tender and
delivery periods. A seller or a short open position holder in that contract may
tender documents to the Exchange expressing his intention to deliver the
underlying commodity. Exchange would select from the long open position holder
for the tendered quantity. Once the buyer is identified, seller has to initiate the
process of giving delivery and buyer has to take delivery according to the delivery
schedule prescribed by the Exchange.
National Multi Commodity Exchange of India Limited (NMCEIL) is the first de-
mutualized, Electronic Multi-Commodity Exchange in India. On 25th July, 2001, it
was granted approval by the Government to organize trading in the edible oil
complex. It has started operating from November 26, 2002. It is being supported
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Commodity exchange in India plays an important role where the prices of any
commodity are not fixed, in an organized way. Earlier only the buyer of produce
and its seller in the market judged upon the prices. Others never had a say.
Today, commodity exchanges are purely speculative in nature. Before discovering
the price, they reach to the producers, end-users, and even the retail investors, at
a grassroots level. It brings a price transparency and risk management in the vital
market.
The commodity markets being cyclical in nature have inherent risks involved. Due
to this, banks have kept away. The exchanges have brought expertise, control,
and transparency of prices. Once the commodities are deemed negotiable and
transferable, warehouse receipts can be an effective tool in the hands of farmers.
They can then wait for prices to soar up before selling their produce. To
encourage and assist farmers to use warehouse receipts, banks like ICICI are
providing up to 70 per cent loans against de-mat receipts which are obtained from
the exchange against physical produce. The idea is to transfer risk from the entity
to the commodity, by aligning repayment of the loan to actual use of the
commodity.
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Thus, the need for risk management strategies in this growth phase is very
essential because most companies do not have a policy for managing commodity
risk. Development of scientific tools for price discovery, promotion of contract
farming and better weather forecasts will help increase confidence and attract
investors to commodities.
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Different types of Commodities Traded:
MCX
Following are the commodities traded in MCX.
Castor Seeds, Soy Seeds, Castor Oil, Refined Soy Oil, Soymeal, RBD Palmolein, Crude Palm Oil,
Groundnut Oil, Mustard Seed, Mustard Seed Oil, Cottonseed Oilcake, Cottonseed
Crude Oil
Rubber, Guar Seed, Gur, Guargum Bandhani, Guargum, Cashew Kernel, Guarseed Bandhani
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NCDEX
Following are the commodities traded in NCDEX.
Base Metals
Gold
Silver
Precious Metals
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Types of traders in a derivatives market:
Hedgers:
Hedgers are those who protect themselves from the risk associated with the price
of an asset by using derivatives. A person keeps a close watch upon the prices
discovered in trading and when the comfortable price is reflected according to his
wants, he sells futures contracts. In this way he gets an assured fixed price of his
produce.
In general, hedgers use futures for protection against adverse future price
movements in the underlying cash commodity. Hedgers are often businesses, or
individuals, who at one point or another deal in the underlying cash commodity.
Take an example: A Hedger pay more to the farmer or dealer of a produce if its
prices go up. For protection against higher prices of the produce, he hedges the
risk exposure by buying enough future contracts of the produce to cover the
amount of produce he expects to buy. Since cash and futures prices do tend to
move in tandem, the futures position will profit if the price of the produce raise
enough to offset cash loss on the produce.
Speculators:
Speculators are some what like a middle man. They are never interested in actual
owing the commodity. They will just buy from one end and sell it to the other in
anticipation of future price movements. They actually bet on the future movement
in the price of an asset. They are the second major group of futures players.
These participants include independent floor traders and investors. They handle
trades for their personal clients or brokerage firms. Buying a futures contract in
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anticipation of price increases is known as ‘going long’. Selling a futures contract
in anticipation of a price decrease is known as ‘going short’. Speculative
participation in futures trading has increased with the availability of alternative
methods of participation.
If the trader’s judgment is good, he can make more money in the futures market
faster because prices tend, on average, to change more quickly than real estate or
stock prices. Futures are highly leveraged investments. The trader puts up a small
fraction of the value of the underlying contract as margin, yet he can ride on the
full value of the contract as it moves up and down. The money he puts up is not a
down payment on the underlying contract, but a performance bond. The actual
value of the contract is only exchanged on those rare occasions when delivery
takes place.
Arbitrators:
According to dictionary definition, a person who has been officially chosen to make
a decision between two people or groups who do not agree is known as Arbitrator.
In commodity market Arbitrators are the person who takes the advantage of a
discrepancy between prices in two different markets. If he finds future prices of a
commodity edging out with the cash price, he will take offsetting positions in both
the markets to lock in a profit. Moreover the commodity futures investor is not
charged interest on the difference between margin and the full contract value.
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Uses of Futures Markets:
In this chapter, the uses of futures markets, especially in connection with futures
commodity and their possible uses for the farmers, traders, banks and others have
been reviewed.
Hedging:
The hedger is a trader who enters the futures market in order to reduce a pre-
existing risk position. Having a position does not mean that the trader must
actually own a commodity. An individual or a firm who anticipates the need for a
certain commodity in the future or a person who plans to acquire a certain
commodity later also has a position in that commodity. In many cases, the hedger
has a certain hedging horizon – the future date when the hedge will terminate. The
hedge can be a long hedge or a short hedge. If the hedger buys futures contract to
hedge, it will be a long hedge.
For example, a roller flourmill owner may like to lock-in the price of the wheat that
he wants to purchase three months later by purchasing wheat futures. If three
months later the wheat prices rise, carrying futures prices along with them, the
flourmill owner will purchase wheat from the spot market at a higher price. The
loss that he may suffer in the cash market will be compensated by sale of futures
at a higher price. Similarly, a farmer can sell three-month futures at the prevailing
price and lock-in his profits at that level. If the prices fall, the loss suffered by the
farmer in the cash market will be compensated by the profit that the farmer will
earn by squaring the transaction in the futures market.
In practice, hedging solutions are not as neat as the ones described above. In the
above example, the goods in question were exactly the same both in the cash and
the futures market, the amounts purchased / sold in the cash market matched the
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futures contract amounts, and the hedging horizons of the farmer and the mill
owner matched the delivery dates of the futures contracts. It will be rare for all
factors to match perfectly; they will differ in time span covered, the amount of
commodity or the physical characteristics of the commodity that are traded in the
cash and the futures markets. Such hedges are known as cross-hedges. In such
cases, the hedger must trade the right number and kind of futures contract to
control the risk in hedged positions as much as possible. There can be situations
where the hedger does not have any definite hedging horizon and may enter into
what is known as risk-minimizing hedge.
Role of Speculators:
Derivative markets have long been viewed with suspicion as speculators are the
most visible players. We consider it appropriate to emphasize that functioning
derivative markets will have speculators who need to be viewed from the point of
view of their economic usefulness and who need to be regulated with a view to
preventing systemic instability.
A speculator is a trader who enters the futures market in search of profit and, by
so doing, willingly accepts increased risks. Different types of speculators may be
categorized by the length of time they plan to hold a position. Traditionally, there
are three kinds of speculators: scalpers, day traders and position traders.
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Scalper’s time horizon is the shortest, ranging from the next few seconds to the
next few minutes and they make profits that may be only one or two ticks, the
minimum allowable price movement. If the prices do not move in the scalper’s
direction within a few minutes of assuming a position, the scalper will like to close
the position and begin looking for a new opportunity. It is understood that scalpers
do not go by the demand and supply positions of the underlying commodity but act
on the ‘sentiment’.
They generate enormous amounts of transactions and are able to survive as they
pay minimum transaction cost. Besides earning profits for themselves, their main
role is to provide liquidity in the market. They provide a party willing to take the
opposite side of a trade for other traders; hedgers know that their orders can be
executed.
Day Traders close their position before the end of trading each day. Their strategy
is to guess the price movements on account of developments during the day,
including announcement of government policies and release of data. Position
Traders maintain overnight positions, which may run into weeks or even months.
They may hold outright positions in which they run huge risks and may also earn
big profits.
The more risk averse among them assume spread positions which may involve
relative price movements in different contracts on the same underlying
commodities or commodities which are closely related. It is pertinent to examine
whether hedgers need speculators. Theoretically, if there are sufficiently large
numbers of short and long hedgers, they may fulfill each other’s need and the
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speculators may have no role. However, in practice, there is always a mismatch
between the time when the short and long hedgers would approach the market
and the speculators fill in this gap.
Some of the leading exchanges of the world are New York Mercantile Exchange
(NYMEX), the London Metal Exchange (LME) and the Chicago Board of Trade
(CBOT).
The government has now allowed national commodity exchanges, similar to the
BSE & NSE, to come up and let them deal in commodity derivatives in an
electronic trading environment. These exchanges are expected to offer a nation-
wide anonymous, order driven; screen based trading system for trading. The
Forward Markets Commission (FMC) will regulate these exchanges
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fix prices, and they have import-export restrictions and a host of other
interventions. Many economists think that we could have major benefits from
liberalization of the agricultural sector.
In this case, the question arises about who will maintain the buffer stock, how will
we smoothen the price fluctuations, how will farmers not be vulnerable that
tomorrow the price will crash when the crop comes out, how will farmers get
signals that in the future there will be a great need for wheat or rice. In all these
aspects the futures market has a very big role to play.
If you think there will be a shortage of wheat tomorrow, the futures prices will go
up today, and it will carry signals back to the farmer making sowing decisions
today. In this fashion, a system of futures markets will improve cropping patterns.
Next, if I am growing wheat and am worried that by the time the harvest comes out
prices will go down, then I can sell my wheat on the futures market. I can sell my
wheat at a price, which is fixed today, which eliminates my risk from price
fluctuations.
The third is the role about storage. Today we have the Food Corporation of India,
which is doing a huge job of storage, and it is a system, which -- in my opinion --
does not work. Futures market will produce their own kind of smoothing between
the present and the future.
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If the future price is high and the present price is low, an arbitrager will buy today
and sell in the future. The converse is also true, thus if the future price is low the
arbitrageur will buy in the futures market. These activities produce their own
"optimal" buffer stocks, smooth prices. They also work very effectively when there
is trade in agricultural commodities; arbitrageurs on the futures market will use
imports and exports to smooth Indian prices using foreign spot markets.
In totality, commodity futures markets are a part and parcel of a program for
agricultural liberalization. Many agriculture economists understand the need of
liberalization in the sector. Futures markets are an instrument for achieving that
liberalization.
The study shows the Beta and Volatility calculation for the purpose of
measuring the risk and variability of different Commodity future.
The study also shows how an investor can minimize risk through
hedging.
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2. RESEARCH DESIGN
2.0 Introduction:
This chapter deals with various aspects of research, the method of conducting
research, research techniques used, methodology of research etc. The success of
a particular research depends a lot on how it is designed.
Commodities are one of the few asset classes that tend to benefit from rising
inflation. As demand for goods and services increases, the price of those goods
and services usually goes up as well, as do the prices of the commodities used to
produce those goods and services. Because commodity prices usually rise when
inflation is accelerating, investing in commodities may provide portfolios with a
hedge against inflation.
India, being an agro-based economy, has markets for most of the agro-based
commodities. The booming commodity investment market offers considerable
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rewards to investors who understand the unique characteristics, benefits and
challenges of these 'capital' assets.
Encompassing asset allocation, investment strategies, and risk control,
commodities has emerged as a new alternative investment class. Investor interest
in commodities has increased dramatically in recent years as the asset class has
outperformed traditional assets such as stocks and bonds.
Commodity trading has its start way back to the pre independence period. Yet the
percentage of investors involved in commodity trading as compared to stock
market is very low.
The problem under study is to know the level of awareness of commodity trading
among brokers and investors. The study helps to know the views of various stock
brokers regarding commodity trading, prospects of commodity trading in India. It
helps us to analyze the shortcomings of commodity market.
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One month commodity prices are taken for the calculation of Risk and
Return.
• Stock brokers of different companies have been chosen so that the study is
unbiased.
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• One month spot prices for commodity futures like Pepper, Jeera, Chana,
Gold, Silver, Copper, Aluminum and Crude Oil etc are collected for
calculation.
2.6 Hypothesis:
Return:
Return is the primary motivating force that drives investment. It represents the
reward for understanding investment.
Risk:
Risk refers to the possibility that the actual out come of an investment will differ
from its expected outcome. More specifically, more investors are concerned about
the actual outcome being less than the expected outcome. The wider the range of
possible outcomes, the greater the risk.
Beta:
Beta is the slope of the characteristic regression line. Beta describes the
relationship between the Commodity return and the Index returns.
Standard Deviation:
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It is a measure of the values of the variables around its mean or it is the square
root of the sum of the squared deviations from the mean divided by the number of
observances. The standard deviation helps to measure the variability of return.
The variability in return includes both systematic and unsystematic risk.
2.7 Methodology:
Methodology here refers to the method as to how the researcher has done his
efforts towards the activity of reviewing the literature. The Methodology includes
the sources of data which include either secondary data or primary data and
even some times the combination of both.
Secondary data are readily available, because they were collected for some other
purpose and which can also be used to solve the present problem. They are the
cheapest and the easiest means of access to information. But for the present
study, more concentration is on primary data.
Primary Data
Primary data are those which the researcher collects directly by himself. In this
project work, primary data is collected by giving questionnaires. Respondents
were given Questionnaires and data were collected..
Secondary Data
Secondary data are those, which are got through reviewing primary data. The
various secondary data used in this work includes
1. Internet
2. Periodicals
3. Journals
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4. Books related to Commodity Market etc.
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2.8 Sampling:
Sampling Technique:
Sample Area:
Bangalore city is Sample area for this project.
Population:
All commodity traded in exchanges will form as the population of the study
Sample size:
Sample size of 40 stock brokers is used for this study.
Primary data:
The study is based on data collected from brokers of various companies with the
help of structured questionnaire. Questionnaire is included in appendix. Data on
various parameters was included like number of years in business, increase in
number of clients from past year, turnover per day were collected to access
information regarding growth in commodity market. Informal discussion is also
carried with few brokers to know their opinion.
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Secondary data:
Websites:
www.karvy.com
www.karvycomtrade.com
www.mcxindia.com
www.ncdex.com
www.indianmba.com
www.icfaipress.org/books/commoditiesmarket
www.finance.indiamart.com/markets/commodity/traders_derivatives_market.html
Books and Magazines related to the study etc.
Field work was done for a period of one month starting from 1 st April, 2007 to 31st
April 2007.Questionnaire was supplied to respondents and data were collected.
Statistical Tools:
Statistical Tools like t-test and correlation are going to be used in addition to bar /
pie diagram using SPSS package to analyze the questionnaire and Excel sheet is
used to calculate Beta and Volatility calculations.
Man has done everything to make it come true but everything has its own
limitation.
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• The historical data available is in the date of the expiry of the contract.
• In this study, only Futures are taken due to time and cost constraints.
• The survey has been done within Bangalore city, which might fail to be
representative of total market.
• Chapter 1 : Introduction
• Bibliography
• Annexure
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3. PROFILES OF INDUSTRY / COMPANY
Commodity markets re of great help not only for their participants but also the
economy as a whole. The twenty year bear market for commodities has drastically
reduced the prices of many commodities to their lowest levels. The present shift in
trend in commodity trading complimented by the global increase in demand will
certainly hold a promising future for the investments in this segment.
Many former developing nations are industrializing and joining the world economy,
creating a massive middle class of consumers. Even as the demand for several
commodities is accelerating, many of the supply lines are tightening. Population
growth and rapid industrialization have ushered in a huge and growing middle
class, which is competing for every additional barrel of crude oil sold in the
international markets, and for every kilogram of wheat, sugar, rubber or gold. And
the increasing purchasing power of the middle class has resulted in firm price
trends.
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electronics, gas and oil for running factories, electricity for heating, and iron and
steel for cars and buses...
To bridge any demand-supply mismatch, a new-generation commodity market has
evolved that enables not only the trader to book profits, but also extends the same
facility to the farmer and common man.
The recovery in the commodity prices is set to gain momentum after a 20-year
downturn cycle. The last commodity market rally started in the 1970s and
continued till the 1980s, when grain and metal producers enjoyed a decade of
rising prices and fat profit margins. This price surge triggered a worldwide
expansion in commodity production, ultimately bridging the demand-supply divide.
The subsequent downturn cycle witnessed commodity prices plunging to their all-
time lows. Taking into consideration the inflationary spiral, several commodity
prices plunged to 100-year lows in real terms, during this period. But the
conditions seem bright for a revival of a commodity upswing cycle now.
The Commodities Super Cycle has five key phases of a commodity cycle, and we
are now entering Phase IV and the best ways to profit over the next three years.
Phase I occurred between 1982 and 1998, when producers cut production… and
yet demand was flat or falling nonetheless. Phase II, from 1998 to 2001, was
marked by chronic under-investment in mines, oil rigs, and plants, after years of
weak demand. Phase III was the turning point. This began in late 2001. This was
the point where demand began to rebound and suppliers began a mad rush to
meet the rising demand.
And yet, as profitable as Phase III was, it only planted the seeds for the most
profitable phase of all: Phase IV, the Lift-off stage. This is the stage we’re entering
now with many commodities and this is where the prices for many resources go
vertical. In effect, the commodity prices are expected to firm up from the current
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year and the international commodity markets are likely to become far more active
and buoyant.
3.2 COMPANY PROFILE:
KARVY, is a premier integrated financial services provider, and ranked among the
top five in the country in all its business segments, services over 16 million
individual investors in various capacities, and provides investor services to over
300 corporates, comprising the who is who of Corporate India. KARVY covers the
entire spectrum of financial services such as Stock broking, Depository
Participants, Distribution of financial products - mutual funds, bonds, fixed deposit,
equities, Insurance Broking, Commodities Broking, Personal Finance Advisory
Services, Merchant Banking & Corporate Finance, placement of equity, IPO’s,
among others. Karvy has a professional management team and ranks among the
best in technology, operations and research of various industrial segments.|
The birth of Karvy was on a modest scale in 1981. It began with the vision and
enterprise of a small group of practicing Chartered Accountants who founded the
flagship company …Karvy Consultants Limited. They started with consulting and
financial accounting automation, and carved inroads into the field of registry and
share accounting by 1985. Since then, They have utilized their experience and
superlative expertise to go from strength to strength…to better their services, to
provide new ones, to innovate, diversify and in the process, evolved Karvy as one
of India’s premier integrated financial service enterprise.
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Thus over the last 20 years Karvy has traveled the success route, towards building
a reputation as an integrated financial services provider, offering a wide spectrum
of services. And they have made this journey by taking the route of quality service,
path breaking innovations in service, versatility in service and finally…totality in
service.
Their values and vision of attaining total competence in their servicing has served
as the building block for creating a great financial enterprise, which stands solid on
their fortresses of financial strength - their various companies.
With the experience of years of holistic financial servicing behind them and years
of complete expertise in the industry to look forward to, they have now emerged as
a premier integrated financial services provider.
And today, they can look with pride at the fruits of their mastery and experience –
comprehensive financial services that are competently segregated to service and
manage a diverse range of customer requirements.
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Karvy Consultants Limited
The first securities registry to receive ISO 9002 certification in India. Registered
with SEBI as Category I Registrar, is Number 1 Registrar in the Country. The
award of being ‘Most Admired’ Registrar is one among many of the
acknowledgements they received for their customer friendly and competent
services.
Registered with SEBI as a Category I Merchant Banker and ranked among the top
10 merchant bankers in the country, the company has built a reputation as a
professional advisor in structuring IPO’s take over assignments and buy back
exercises.
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Karvy Global Services Limited
Karvy Global Services is the global services arm of the Karvy Group of Companies
engaged in the business of offshore business process outsourcing in the areas of
human resource outsourcing, finance and accounting operations outsourcing,
research and analytics and back office processing operations.
39
The company provides investment, advisory and brokerage services in Indian
Commodities Markets. And most importantly, they offer a wide reach through their
branch network of over 225 branches located across 180 cities.
Here they enable trade in all goods and products of agricultural and mineral origin
that include lucrative commodities like gold and silver and popular items like oil,
pulses and cotton through a well-systematized trading platform.
Their wide national network, spanning the length and breadth of India, further
supports these advantages. Regular trading workshops and seminars are
conducted to hone trading strategies to perfection. Every move made is a
calculated one, based on reliable research that is converted into valuable
information through daily, weekly and monthly newsletters, calls and intraday
alerts. Further, personalized service is provided here by a dedicated team
committed to giving hassle-free service while the brokerage rates offered are
extremely competitive. Their commitment to excel in this sector stems from the
immense importance that commodity broking has to a cross-section of investors;
farmers, exporters, importers, manufacturers and the Government of India itself.
40
About Karvy Comtrade Limited:
Karvy Comtrade Limited is another venture of the prestigious Karvy group. With
our well established presence in the multifarious facets of the modern Financial
services industry from stock broking to registry services, it is indeed a pleasure for
us to make foray into the commodities derivatives market which opens yet another
door for them to deliver their service to their beloved customers and the investor
public at large.
With the high quality infrastructure already in place and a committed Government
providing continuous impetus, it is the responsibility of them, the intermediaries to
deliver these benefits at the door-steps of their esteemed customers.
41
With their expertise in financial services, existence across the lengths and
breadths of the country and an enviable technological edge, they are all set to
bring to you, the pleasure of investing in this burgeoning market, which can touch
upon the lives of a vast majority of the population from the farmer to the corporate
alike. They are confident that the commodity futures can be a good value addition
to your portfolio.
Milestones of Karvy:
42
Board of Directors:
Mr. C. Parthasarathy
Chairman
Mr. M. Yugandhar
Director
V. Ganesh
V. Mahesh
K. Sridhar
S. Gopichand
J. Ramaswamy
M.S Manohar
S. Ganapathy Subhramanyam
Ashok. K Mittal
43
Achievements:
Quality Policy:
To achieve and retain leadership, Karvy shall aim for complete customer
satisfaction, by combining its human and technological resources, to provide
superior quality financial services. In the process, Karvy will strive to
exceed Customer's expectations.
Quality Objectives:
services.
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• Establish a partner relationship with its investor service agents and vendors
• Provide high quality of work life for all its employees and equip them with
• Continue to uphold the values of honesty & integrity and strive to establish
choice of same.
45
4. ANALYSIS AND INTERPRETATION OF DATA
Statistics
N Valid 40
Missing 0
Cumulative
Frequency Percent Valid Percent Percent
Valid Less than 1 year 9 22.5 22.5 22.5
1- 2 years 12 30.0 30.0 52.5
More than 3 years 19 47.5 47.5 100.0
Total 40 100.0 100.0
Graph 1:
20
15
Frequency
10
0
Less than 1 year 1- 2 years More than 3 years
RESPONDENTS EXPERIENCE IN BUSINESS
46
Analysis:
The Indian financial sector plays an important role in canalizing household savings
to corporate as well government sector primarily for investment in industrial,
infrastructure as well as agriculture and services sectors. Since the process of
liberalization began in 1991, the Indian financial services sector has been
transformed in a vibrant and competitive industry. The introduction of new
instruments and relaxation of investment limits for Foreign Direct Investment (FDI)
and Foreign Institutional Investment (FII) has helped broaden the financial
services sector. There has-been an introduction of new financial products over the
years. Many sectors have been opened up for new private players. The entry of
new players has resulted in a more sophisticated range of financial services being
offered corporate and retail customers which has forced the existing players to
upgrade their products and distribution channels. This is particularly witnessed in
the non-banking financial services sector such as the brokerage industry.
From the above data it is clear that 47.5% of the respondents are settled in
brokerage business more than 3 years.
Statistics
N Valid 40
Missing 0
Cumulative
Frequency Percent Valid Percent Percent
Valid Yes 21 52.5 52.5 52.5
No 19 47.5 47.5 100.0
Total 40 100.0 100.0
47
Graph – 2:
Yes
No
Analysis:
Statistics
N Valid 21
Missing 19
48
DAILY TURNOVER OF INVESTORS IN COMMODITY TRADING
Cumulative
Frequency Percent Valid Percent Percent
Valid Less than 25 Lakhs 5 12.5 23.8 23.8
25 Lakhs to 1 Crore 9 22.5 42.9 66.7
More than 1 Crore 7 17.5 33.3 100.0
Total 21 52.5 100.0
Missing System 19 47.5
Total 40 100.0
Graph – 3:
10
8
Frequency
0
Less than 25 Lakhs 25 Lakhs to 1 Crore More than 1 crore
Analysis:
The Indian financial services industry is witnessing up the trend, with strong
growth catalysts coinciding at an appropriate time. The growths catalysts are
categorized into cultural, demographic, economic and political developments have
changed the perception of India as an investment destination. With a GDP growth
of 8.1% in 2006-07 India is one of the fastest growing free market democracies in
the world. A savings rate of 24.2% and service sector contribution of more than
49
50% akin to the developed nations is improving the country’s rating in the world
investing community. It can be seen from table majority of brokers are having daily
turnover between 25 lakhs to one crore.
Statistics
N Valid 21
Missing 19
Cumulative
Frequency Percent Valid Percent Percent
Valid Yes 15 37.5 71.4 71.4
No 6 15.0 28.6 100.0
Total 21 52.5 100.0
Missing System 19 47.5
Total 40 100.0
Graph 4:
14
12
Frequency
10
0
Yes No
INCREASE IN VOLUME OF TRADE OVER LAST YEAR
50
Analysis:
Statistics
IMPROVEMENT IN NO OF CLIENTS
N Valid 21
Missing 19
IMPROVEMENT IN NO OF CLIENTS
Cumulative
Frequency Percent Valid Percent Percent
Valid Yes 17 42.5 81.0 81.0
No 4 10.0 19.0 100.0
Total 21 52.5 100.0
Missing System 19 47.5
Total 40 100.0
51
Graph 5:
IMPROVEMENT IN NO OF CLIENTS
Yes
No
Missing
Analysis:
Since 2002 when the first national level commodity exchange started, the
exchanges have conducted brisk business in commodities trading. In the last three
years, there has been a great revival of the commodities trading in India, both in
terms of the number of commodities allowed for futures trading as well as the
value of trading. While in year 2000, trading was allowed in only 8 commodities,
the number jumped to 80 commodities in June 2004. All most all the respondents
have said there is drastic increase in number of investors.
Statistics
N Valid 21
Missing 19
52
INVESTORS TRADING IN COMMODITIES WITH PROPER KNOWLEDGE
Cumulative
Frequency Percent Valid Percent Percent
Valid Yes 12 30.0 57.1 57.1
No 9 22.5 42.9 100.0
Total 21 52.5 100.0
Missing System 19 47.5
Total 40 100.0
Graph 6:
Yes
No
Missing
Analysis:
Knowledge about the financial sector have grown tremendously in the last few
years, thanks to the structural changes in the market, and the economy is now
ripe. Once India has skills in the core markets, capabilities in commodities can be
easily applied into unexpected areas. From the above we can make out there is a
mixed opinion regarding investors’ knowledge on commodity market.
53
Table 7: Showing commodity market is a safe investment avenue for retail
investors
Source: question No.7 from Questionnaire
Statistics
N Valid 21
Missing 19
Cumulative
Frequency Percent Valid Percent Percent
Valid Yes 13 32.5 61.9 61.9
No 8 20.0 38.1 100.0
Total 21 52.5 100.0
Missing System 19 47.5
Total 40 100.0
Graph 7:
Yes
No
Missing
54
Analysis:
Leverage is very important to the commodities markets. Unlike the stock market,
where you might have to invest Rs.10, 000 to leverage Rs.10, 000. A commodities
trader can leverage tens of thousands of rupees worth of a commodity. Also unlike
stocks, Commodities have intrinsic value and will not go bankrupt. From the above
table it is clear that 61.9% of respondents are telling that it is a safe for Investment
Avenue. And 38.1% are telling that not safe for investment.
Statistics
N Valid 21
Missing 19
Cumulative
Frequency Percent Valid Percent Percent
Valid Yes 15 37.5 71.4 71.4
No 6 15.0 28.6 100.0
Total 21 52.5 100.0
Missing System 19 47.5
Total 40 100.0
55
Graph 8:
RESPONDENT'SDEALINGWITHSPECIFICCOMMODITIES
14
12
Frequency
10
0
Yes No
RESPONDENT'SDEALINGWITHSPECIFICCOMMODITIES
Analysis:
It is clear from above chart that some brokers dealing with specific commodities
and some are not.
Statistics
N Valid 40
Missing 0
Cumulative
Frequency Percent Valid Percent Percent
Valid Gold 15 37.5 37.5 37.5
Cereals 4 10.0 10.0 47.5
Oil 18 45.0 45.0 92.5
Other 3 7.5 7.5 100.0
Total 40 100.0 100.0
56
Graph 9:
20
15
Frequency
10
0
Gold Cereals Oil Other
COMMODITY WISE PREFERENCES BY RESPONDENTS
Analysis:
Statistics
N Valid 40
Missing 0
57
REASON FOR COMMODITY PREFERENCES
Cumulative
Frequency Percent Valid Percent Percent
Valid More no of Investors 9 22.5 22.5 22.5
Low Risk 12 30.0 30.0 52.5
High Rate of Return 14 35.0 35.0 87.5
Any Other 5 12.5 12.5 100.0
Total 40 100.0 100.0
Graph 10:
12.5
10.0
Frequency
7.5
5.0
2.5
0.0
More no of Investors Low Risk High Rate of Return Any Other
REASON FOR COMMODITY PREFERENCES
Analysis:
Commodities also give the investor the ability to participate in virtually all sectors
of the world economy and have the potential to produce returns that tend to be
independent of other markets. In fact portfolios that add commodity investments
can actually lower the overall portfolio risk by diversification. From the above table
it is clear that the most of the brokers who prefers specific commodity due to high
rate of return.
58
Table 11: Showing opinion about commodity market in India
Source: question No. 11 from Questionnaire
Statistics
N Valid 21
Missing 19
Cumulative
Frequency Percent Valid Percent Percent
Valid Highly Volatile 9 22.5 42.9 42.9
Volatile 6 15.0 28.6 71.4
Stable 4 10.0 19.0 90.5
Un Stable 2 5.0 9.5 100.0
Total 21 52.5 100.0
Missing System 19 47.5
Total 40 100.0
Graph 11:
10
8
Frequency
0
Highly Volatile Volatile Stable Un Stable
OPINION ABOUT COMMODITY MARKET IN INDIA
59
Analysis:
Statistics
N Valid 21
Missing 19
Cumulative
Frequency Percent Valid Percent Percent
Valid Positive 13 32.5 61.9 61.9
Negative 6 15.0 28.6 90.5
No impact 2 5.0 9.5 100.0
Total 21 52.5 100.0
Missing System 19 47.5
Total 40 100.0
60
Graph 12:
12.5
10.0
Frequency
7.5
5.0
2.5
0.0
Positive Negative No impact
Analysis:
There are at present restrictions on the movement of certain goods from one state
to another. These need to be removed so that a truly national market could
develop for commodities. Also, regulatory changes are required to bring about
uniformity in octroi and sales taxes etc. VAT has been introduced in the country in
2005, but has not yet been uniformly implemented by all states. It is clear from the
above table that most of the brokers felt that VAT has a positive effect on
commodities market, because it will help in smooth flow of goods in these markets
and enhance the delivery rate too.
Statistics
N 21 Valid
19 Missing
HIGHEST VOLUME OF COMMODITY
61
Cumulative
Frequency Percent Valid Percent Percent
Valid Metals 11 27.5 52.4 52.4
Agro - Based Commodities 10 25.0 47.6 100.0
Total 21 52.5 100.0
Missing System 19 47.5
Total 40 100.0
Graph 13:
HIGHESTVOLUMEOFCOMMODITY
Metals
Agro-B ased
Com odities
Missing
Analysis:
It is clear from the above table that most of the brokers have a mixed response.
Statistics
N Valid 21
Missing 19
62
FURTHER GROWTH IN COMMODITY MARKET
Cumulative
Frequency Percent Valid Percent Percent
Valid Yes 18 45.0 85.7 85.7
No 3 7.5 14.3 100.0
Total 21 52.5 100.0
Missing System 19 47.5
Total 40 100.0
Graph 14:
20
15
Frequency
10
0
Yes No
Analysis:
A review of the nature of institutional and policy level constraints facing this
segment calls for more focused and pragmatic approach from government, the
regulator and the exchanges for making the agricultural futures markets a vibrant
segment which can play an important role especially in an agriculture dominated
economy of India.
63
Most of the brokers are feel that commodities market needs positive push from
government and industry.
Table 15: Showing respondent’s opinion about success ratio of commodity trade
in India.
Source: question No. 15 from Questionnaire
Statistics
N Valid 40
Missing 0
Cumulative
Frequency Percent Valid Percent Percent
Valid 3:10 6 15.0 15.0 15.0
5:10 8 20.0 20.0 35.0
7:10 19 47.5 47.5 82.5
10:10 7 17.5 17.5 100.0
Total 40 100.0 100.0
64
Graph 15:
3:10
5:10
7:10
10:10
Analysis:
Most of the brokers are of the opinion that commodity market in India is in
progressive stage. The Indian economy is witnessing a mini revolution in
commodity market. They feel SEBI and government has to create more
awareness among the investors.
From the above table it is clear that success ratio in Commodity Market is 70%
65
4.2 Calculation of Beta and Volatility:
This part of the chapter provides the calculation of Beta and Volatility.
Table 4.2 (1)
Calculation of Beta and Volatility of Gold futures
n = 26
66
Beta = n * Σxy - (Σx) (Σy)
n * Σx 2-(Σx) 2
26 * 5.357604 – (- 2.314649861)2
Beta = 290.434
133.94
Beta = 2.16
Volatility = 0.656
Inference:
One Percent change in INDX Metal return causes 2% change in the Commodity
return. When there is a decline of 10 % in the index return, the Commodity with a
beta of 2 would give a negative return of 20%. The beta value of Gold is more than
1; it is cleat that Gold futures were more risky in the month of March 2007.
67
Calculation of Beta and Volatility of Silver futures
N = 26
68
n * Σx 2-(Σx) 2
26 * 24.929823 – (-2.3146499)2
648.175 – 5.3576
Beta = 882.987
642.817
Beta = 1.37
Volatility = 1.826
Inference: One percent change in INDX Metal returns causes exactly one
percent change in the Commodity return. Since the Beta value of Silver is more
than 1 it is considered to be risky.
69
RETURN
ON INDX RETURN ON
Aluminium Aluminium METAL INDX METAL
Date Close (Rs) % (Y) close (X) X*Y X*X
n = 26
n * Σx 2-(Σx) 2
70
Beta = 26 *15.687149 – (-2.3146499 * - 2.7580026)
26 * 24.929823 - (- 2.3146499)2
Beta = 401.482
642.81
Beta = 0.624
Volatility = 1.157
Inference:
From the above calculations it clearly indicates that the Beta value of Aluminum is
less than 1, it is considered to be less risky.
71
Copper RETURN INDX RETURN ON
Close ON Copper METAL INDX METAL
Date (Rs) % (Y) close (X) X*Y X*X
n = 26
n * Σx 2-(Σx) 2
72
Beta = 26 * 26.195583 – (-2.314649859 * 8.668773775)
26 * 24.92982302 - (- 2.314649859)2
648.175 – 5.3576
Beta = 701.15
642.817794
Beta = 1.09
Volatility = 1.363
Inference:
One percent change in INDX Metal returns causes exactly one percent change in
the Commodity return. Since the Beta value of Copper is more than 1 it is
considered to be risky.
Table 4.2 (5)
Calculation of Beta and Volatility of Crude Oil futures
73
Crude
Oil RETURN ON INDX RETURN
Close Crude Oil % Energy ON INDX
Date (Rs) (Y) close Energy (X) X*Y X*X
n = 26
n * Σx 2-(Σx) 2
74
26 * 19.67905569 – (4.648941883)2
511.654 – 21.61266
Beta = 577.475
490.04
Beta = 1.17
Volatility = 1.352
Inference:
It is cleared from the above calculations that the beta value of Crude Oil is more
than 1 hence it is more volatile and it is considered to be risky.
75
Chana INDX
Close RETURN ON AGRI RETURN ON
Date (Rs) Chana % (Y) close INDX AGRI(X) X*Y X*X
n * Σx 2-(Σx) 2
26 * 13.11337398 – (0.565400968)2
76
Beta = 13.8762 – 13.177
340.9458 - 0.3197
Beta = 0.6992
340.626
Beta = 0.002
Volatility = 1.545
77
Pepper INDX RETURN ON
Close RETURN ON AGRI INDX
Date (Rs) Pepper % (Y) close AGRI(X) X*Y X*X
n * Σx 2-(Σx) 2
78
Beta = 26 * - 0.4508 – (0.5654 * 19.5487)
26 * 13.113 – (0.5654)2
340.938 – 0.3196
Beta = - 22.7736
340.61
Beta = -0.067
Volatility = 1.554
Inference: Negative Beta value indicates that the Commodity return moves in the
opposite direction to the Index return. A Commodity with negative beta of -1 would
provide a return on 10 % if the Index return declines by 10% and vice versa. But
usually the negative beta value can be seen rare in the market.
79
Jeera INDX
Close RETURN ON AGRI RETURN ON
Date (Rs) Jeera % (Y) close INDX AGRI(X) X*Y X*X
n = 26
n * Σx 2-(Σx) 2
80
Beta = 26 * 0.6336 – (0.5654 *16.171)
26 * 13.11337 – (0.5654)2
340.94 – 0.31967
Beta = 7.3306
340.62
Beta = 0.021
Volatility = 1.313
Inference: Since the beta value is less than 1 Jeera futures is less risky in the
month of March.
Table 4.2(9)
List of Beta value for 8 Commodity Futures
81
Aluminium 0.624
Copper 1.09
Crude Oil 1.17
Chana 0.002
Pepper - 0.067
Jeera 0.021
Graph 4.2(9)
Showing the beta values for 8 commodity Futures
Beta Value
2.5
1.5
1 Beta Value
0.5
0
Gold
Silver
Aluminium
Copper
Crude Oil
Chana
Pepper
Jeera
-0.5
Table 4.2(10)
List of Volatility for 8 Commodity Futures
Commodity Volatility
Gold 0.656
Silver 1.826
82
Aluminium 1.157
Copper 1.363
Crude Oil 1.352
Chana 1.545
Pepper 1.554
Jeera 1.313
Graph 4.2(10)
Showing the beta values for 8 commodity Futures
Volatility
2
1.8
1.6
1.4
1.2
1 Volatility
0.8
0.6
0.4
0.2
0
a
r
er
er
a
il
d
m
lv e
an
er
ol
pp
iu
pp
G
Je
e
Si
Ch
in
Co
Pe
ud
um
Cr
Al
Findings:
83
Farmers, traders, producers, investors lack knowledge about the course of prices
and overall commodities markets.
• The present restrictions on the movement of certain goods from one state
to another, affects the prices largely.
• Gold, aluminium, copper zinc etc have scaled dizzy heights. This has
created anxiety in the minds of stakeholders such as farmers, traders,
producers, investors and final consumers.
• The Beta value is more than 1 in case of Gold and Silver it indicates that
the investors can safely invest when the Beta is high
• The beta value is less than 1, in case of Aluminium, it shows that the price
variation is high and the return is comparatively low or some times an
investor has to incur a loss due to fluctuation of price.
84
• The beta value is also negative incase of Pepper futures for the month of
March, because of high price fluctuation.
Suggestions
• Investor should carefully study the market and risk involved before investing
85
• Corporates and physical market players should participate in the commodity
exchanges, which would streamline trading by bringing into the market
information on the fundamentals and further improving the price discovery
process to make it more efficient
• In order to match up with this phenomenal growth and pace, there is always
going to be a need for passionate, trained commodities professionals. In
addition, the fast changing commodities sector demands that professionals
learn new skills, improve their efficiency, learn to compete and think out of
the box. All this requires an education that is intensive, comprehensive and
closely linked to the commodities derivatives market, through experiential
learning.
• If transport network and storage facilities improve across the board in the
country it would be easy to cut down on transactions costs and give
consumers quality goods at reasonable prices. That will also help
commodity trade.
• It is imperative that the Government should grant more powers to the FMC
to ensure an orderly development of the commodity markets. The SEBI and
FMC also need to work closely with each other due to the inter-relationship
between the two markets.
86
• Mutual funds companies should come forward and invest more in
commodity market ( i,e percentage of investment should go up)
• More brokers should come in commodity market and set their business.
• Only few commodities like Gold, Oil, and Silver are getting popularized so,
concentrate on other commodities also to increase volume of trade.
• Government and industry should take further steps for future growth of
commodities market.
A review of the nature of institutional and policy level constraints facing this
segment calls for more focused and pragmatic approach from government, the
regulator and the exchanges for making the agricultural commodity markets a
vibrant segment for investment which can play an important role especially in an
agriculture dominated economy of India.
The analysis of data shows that the level of awareness is low among investors and
brokers due to various reasons including lack of knowledge among farmers,
producers, brokers, etc improper information flow, high volatility of the prices of
commodities, lack of proper regulations, etc. Right policies pursued we can
strengthen our commodity base and sustainable investment flow into spot and
futures of commodities which will stabilize it and ensure a fair return to investors.
For this to happen it is imperative that there is a flow of right information to
stakeholders.
CONCLUSION
India is one of the top producers of a large number of commodities, and also has a
long history of trading in commodities. The commodities market has seen ups and
87
down. The market has made enormous progress in terms of technology,
transparency and the trading activity. The management of price risk is going to
assume even greater importance in future with the promotion of free trade and
removal of trade barriers in the world.
The study is an investigation into the commodities markets in India. The study has
surveyed the brokers. The study has outlined the status of commodities markets in
Bangalore and commodities in the Indian context. The study is aimed to know the
awareness level of commodities market among brokers and investors.
The analysis of data shows that the level of awareness is low among investors and
brokers due to various reasons including lack of knowledge among farmers,
producers, brokers, etc improper information flow, high volatility of the prices of
commodities, lack of information flow.
BIBILOGRAPHY
A) BOOKS:
88
• Punithavathy Pandian, “Security Analysis and Portfolio
Management”, Vikas Publishing House.
B) WEB SITES:
www.karvy.com
www.karvycomtrade.com
www.mcxindia.com
www.ncdex.com
www.indianmba.com
www.icfaipress.org/books/commoditiesmarket
www.finance.indiamart.com/markets/commodity/traders_derivatives_market
.html
ANNEXURE
Questionnaire:
89
I am Kalyani.K pursuing my 4th semester MBA from Kristu Jayanti College of
Management and Technology. As a part of the course, I am doing a project titled
“Investment Pattern in Commodities and Associated Risks”.
I would be grateful if you would answer the following questions. Your valuable time
spared will assist me in collecting relevant data for my project. Information
collected is assured of confidentiality and will be strictly used for the project only.
Kalyani.K.
------------------------------------------------------------------------------------------------------------
PERSONAL DETAILS:
Name : ________________________________________________
E-Mail ID : ________________________________________________
Contact no : ________________________________________________
Designation : ________________________________________________
-----------------------------------------------------------------------------------------------------------
a. Yes b. No
90
4. Whether there is increase in volume of trade over last year?
a. Yes b. No
a. Yes b. No
a. Yes b. No
a. Yes b. No
a. Yes b. No
a. Gold
b. Cereals
c. Oil
d. Other
a. More no of investors
b. Low risk
91
c. High rate of return
d. Any other
a. Highly volatile
b. Volatile
c. Stable
d. Un Stable
a. Positive
b. Negative
c. No impact
13. Show which of the following has the highest volume of commodity
a. Bullion Market
b. Metals
c. Agro - based commodities
14. Does Government or Industry will take responsibility for further growth
in commodity market?
a. Yes b. No
15. What is the success ratio of commodity trade in India as per your opinion?
92