A PROJECT REPORT ON

TREND ANALYSYS OF COMMODITY MARKET; COPPER

UNDERTAKEN AT:

NIRMAL BANG SECURITIES PVT. LTD.

Cannaught Place, New Delhi.

Submitted By: MOHAMMED ASIF Guided By: MR. SHADAB POST GRADUATION PROGRAMME (FALL WINTER 2010-12) ISBE-(A) SECTION- FD-1 ID NO. -D1012FWISBE-A10255(GGN-2B-GA-2038) INDIAN INSTITUTE OF PLANNING AND MANAGEMENT
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DECLARATION
I, MOHAMMED ASIF here by declare that the project report entitled TREND ANALYSYS OF COMMODITY MARKET; COPPER is based on my own work and my indebtedness to other work/ publications, if any have been duly acknowledged at the relevant place.

PLACE: New Delhi DATE: MOHAMMED ASIF

ACKNOWLEDGEMENT
To acknowledge is very great way to show your gratitude towards the persons who have contributed in your success in one or other way. I find words inadequate to express my gratitude to Mr. DHARMESH PATEL for providing me an opportunity to carry out my Project as such a well reputed and leading stock broking company Nirmal Bang Securities Private Limited.

At the very outset of the training I deem it is my pious duty to express my sincere thanks also to companys Gujarat Head Mr. Dharmesh Patel for his continuous guidance and supervision and support during the project.

I would like to thank MR. SHADAB, who has guided me for my project work and provided encouragement through out my training period. This study could not have been successful without the valuable input of the customer of Nirmal Bang.

Table of contents
S.no Topic 1. EXECUTIVE SUMMARY 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. INTRODUCTION RESEARCH OBJECTIVES METHODOLOGY & Page No. 5 6 7-10 11-21 22-44 45-55 56-68 69 70 70 71

BODY OF THE REPORT - SECTOR OVERVIEW COMPANY DETAILS PRIMARY FINDINGS INTERNSHIP ACTIVITIES ASSESSMENT OF THE INTERNSHIP Conclusion Recommendations ILLUSTRATION & ANNEXURE BIBLIOGRAPHY

EXECUTIVE SUMMARY
This project is completely based on market research of Awareness of Commodity

Market. Under this research, we have taken 100 sample sizes of which 100 questionnaires belong to Retail investors. On the basis of that we have assessed the awareness of the people towards commodity market, their preference towards trading in commodity market & in context to segment (Agro, Precious metals). For this research, firstly I draft a questionnaire for the research purpose & then I look upon the working class people of my society for my research. While pursuing my research work I came to know that majority of Indian investors are not aware of organized commodity market; their perception about is of risky to very risky investment. Many of them have wrong impression about commodity market in their minds. It makes them suspicious towards commodity market. Concerned authorities have to take initiative to make commodity trading process easy and simple. There is no doubt that in near future commodity market will become Hot spot for Indian farmers rather than spot market. And producers, traders as well as consumers will be benefited from it. But for this to happen one has to take initiative to standardize and popularize the Commodity Market.

INTRODUCTION:
LEARNING/WORKING TILL DATE:
The 2months at Nirmal Bang had been a very fruitful experience.I realized that no matter how much good we are in learning from books, the real situation is faced when one enter into the real market.The corporate structure is completely different. With NIRMAL BANG I got the chance to implement my marketing knowledge and skill to develop the business of the franchisee. DATABASE COLLECTION The initial task was to create a database of the potential individual client. The database was formed through various methods. Firstly, the name and phone numbers of the investors were collected from the internet and from newspaper. Secondly, initially I had to accompany my seniors to campaigning programs where name and phone numbers of individual clients were collected. FIXING APPOINTMENTS The next step in acquiring clients were to give them a call and finalizing an appointment with the interested individuals. VISITINGS POTENTIAL CLIENTS After the appointment is fixed, the next step was to visit these potential clients. I was most of the time accompanied by a senior while visiting any client. I had to visit many clients mostly in Vasantkunj, Hauzkhas,Noida etc. In these client visits, we used to pitch our product and services according to the needs of the clients. FOLLOW UP PROCESS Most of the potential clients were not readily convinced at the first visit. Thus I had to keep in touch with these clients and updating my seniors with the present situation CLOSING DEAL When a client is convinced, we needed to close the deal by filling up our forms and getting the required documents like Xerox of PAN card, Xerox of address proof, photograph, etc. When all these formalities were completed, only then the deal was completed

RESEARCH METHODOLOGY:
Research methodology is the Procedure adopted for conducting the research study. Research methodology should be carefully planned as the accuracy reliability and adequacy of results is totally depending on the Research Methodology followed. It gives the researcher a guideline by which he/she can decide which techniques and procedures will be applicable to a given problem. Moreover it helps in the evaluation of research by other also. So for the research to be successful, purposeful and effective the researcher should plan the Research Methodology before preceding the study.

The following aspect should be considered while designing a Research Methodology.

Research Problem The first step while conducting a research is to carefully define a problem as the report emphasis on the TREND

ANALYSIS OF COPPER

Research design:
A research study conducted scientifically has a specific framework of research from the problem identification to the research study. The framework of conducting the research is known as Research Design. After defining the research problem in a clear-cut terms it will be required to prepare such a research design which will state the conceptual structure within which the research would be conducted. The research study presently done is both subjective and exploratory The study is subjective because. The sampling technique was convincing sampling. Use of survey method with the sample population was done in order to extract data. Structural and well thought out instruments for collection of data were used.

 This

measurement-based methodology focuses on market measurement, analysis,

forecasting, strategy, development and monitoring. Data retrieved from the secondary and primary research regarding the awareness of commodity market was compiled, analyzed and to provide a market structure and market forecasts.

Sampling Population
For conducting the research study, the population selected was the Investors of India.

Sample size:
Investors of south Delhi region have been taken for the research purpose. In order to realize the study the objectives a considerably volume of both primary and secondary data is needed. It has been therefore found necessary to conduct an Interview schedule for gathering relevant data from the users. Primary Data has been collected from the investors during May 11 Jun 11 with the help of a structured Questionnaire with convenience judgment sample of 100 respondents have been taken for carrying out the study. These respondents were the working class & businessmen of the society. Secondary Data the information regarding the Indian commodity market has been drawn from various published sources. They include Professional business Journals and Magazines, besides the Newspapers. The data relating to Nirmal Bang Commodities has been collected from company website and its published sources. This study is necessarily based on the limited knowledge and little practical exposure the constraints of resources and time have further imposed limits to the study boundaries.

RATIONALE FOR STUDY:

The main objective of the study is to find out the awareness level of the persons towards commodity market. The need for this can be explained if one knows the importance of understanding the Customer awareness. So in the following paragraph the Customer awareness and its role in the success of an organization have been explained. Customer awareness is taken up to boost the sales of a product by the company. Companies having service facilities may service a product and price is according and provide it through the sub brokers and franchise by its distribution network. Considering the fact that consumer according to the time need, want and the purchasing power, it depends on the services therefore, the marketers rely on the marketing mix to cater to the customers efficiently and effectively. So the companies giving the service, pricing and planning them have to carefully look into the minds of the consumers and place the services favorably in the minds of the consumers.

LIMITATIONS:

The respondents of the questionnaire are very busty and could not afford more time to answer. The average time to response was 5-6 minutes only. A limited sample size of 100 customers was considered because of time constraint. An assumption is made that the sample represents the whole population. It will not carry the total reflection of the copier market. Total sample size is comparatively less to represent the entire population. The data was of primary nature. So the degree biases were relatively high as the sample was randomly selected.

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INDUSTRY PROFILE:
HISTORY OF THE STOCK BROKING INDUSTRY:
Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago.

In 1887, they formally established in Bombay, the "Native Share and Stock Brokers' Association" (which is alternatively known as "The Stock Exchange"). In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated. Thus in the same way, gradually with the passage of time number of exchanges were increased and at currently it reached to the figure of 24 stock exchanges.

This was followed by the formation of associations /exchanges in Ahmadabad (1894), Calcutta (1908), and Madras (1937). In order to check such aberrations and promote a more orderly development of the stock market, the central government introduced a legislation called the Securities Contracts (Regulation) Act, 1956. Under this legislation, it is mandatory on the part of stock exchanges to seek government recognition. As of January 2002 there were 23 stock exchanges recognized by the central Government. They are located at Ahmadabad, Bangalore, Baroda, Bhubaneswar, Calcutta, Chennai,(the Madras stock Exchanges ), Cochin, Coimbatore, Delhi, Guwahati, Hyderabad, Indore, Jaipur, Kanpur, Ludhiana, Mangalore, Mumbai(the National Stock Exchange or NSE), Mumbai (The Stock Exchange), popularly called the Bombay Stock Exchange, Mumbai (OTCExchange of India), Mumbai (The Inter-connected Stock Exchange of India), Patna, Pune, and Rajkot. Of course, the principle bourses are the National Stock Exchange and The Bombay Stock Exchange, accounting for the bulk of the business done on the Indian stock market.

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BSE (BOMBAY STOCK EXCHANGE)

The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is the first Stock Exchange in the Country to have obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts (Regulation) Act, 1956.

A Governing Board having 20 directors is the apex body, which decides the policies and regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors, who are from the broking comm Unity (one third of them retire ever year by rotation), three SEBI nominees, six public representatives and an Executive Director & Chief Executive Officer and a Chief Operating Officer.

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NSE (NATIONAL STOCK EXCHANGE)

NSE was incorporated in 1992 and was given recognition as a stock exchange in April 1993. It started operations in June 1994, with trading on the Wholesale Debt Market Segment. Subsequently it launched the Capital Market Segment in November 1994 as a trading platform for equities and the Futures and Options Segment in June 2000 for various derivative instruments.

MCX (MULTI COMMODITY EXCHANGE)

MULTI COMMODITY EXCHANGE of India limited is a new order exchange with a mandate for setting up a nationwide, online multi-commodity market place, offering unlimited growth opportunities to commodities market participants. As a true neutral market, MCX has taken several initiatives for users in a new generation commodities futures market in the process, become the countrys premier exchange.

MCX, an independent and a de-mutualized exchange since inception, is all set up to introduce a state of the art, online digital exchange for commodities futures trading in the country and has accordingly initiated several steps to translate this vision into reality.

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NCDEX (NATIONAL COMMODITIES AND DERIVATIVES EXCHANGE)

NCDEX started working on 15th December, 2003. This exchange provides facilities to their trading and clearing member at different 130 centers for contract. In commodity market the main participants are speculators, hedgers and arbitrageurs.

Facilities Provided By NCDEX

NCDEX has developed facility for checking of commodity and also provides a wear house facility By collaborating with industrial partners, industrial companies, news agencies, banks and developers of kiosk network NCDEX is able to provide current rates and contracts rate. To prepare guidelines related to special products of securitization NCDEX works with bank. To avail farmers from risk of fluctuation in prices NCDEX provides special services for agricultural. NCDEX is working with tax officer to make clear different types of sales and service taxes. NCDEX is providing attractive products like weather derivatives

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STOCK MARKET BASIC

What are corporations?
Companies are started by individuals or may be a small circle of people. They pool their money or obtain loans, raising funds to launch the business. A choice is made to organize the business as a sole proprietorship where one Person or a married couple owns everything, or as a partnership with others who may wish to invest money. Later they may choose to "incorporate". As a Corporation, the owners are not personally responsible or liable for any debts of the company if the company doesn't succeed. Corporations issue official-looking sheets of paper that represent ownership of the company. These are called stock certificates, and each certificate represents a set number of shares. The total number of shares will vary from one company to another, as each makes its own choice about how many pieces of ownership to divide the corporation into. One corporation may have only 2,500 shares, while another, such as IBM or the Ford Motor Company, may issue over a billion Shares. Companies sell stock (pieces of ownership) to raise money and provide funding for the expansion and growth of the business. The business founders give up part of their ownership in exchange for this needed cash. The expectation is that even though the owners have surrendered a portion of the company to the Public, their remaining share of stock will become increasingly valuable as the business grows. Corporations are not allowed to sell shares of stock on the open

Stock market without the approval of the Securities and Exchange Commission (SEC). This transition from a privately held corporation to a publicly traded one is Called going public, and this first sale of stock to the public is called an initial public offering, or IPO.

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 Why do people invest in the stock market?

When you buy stock in a corporation, you own part of that company. This gives you a vote at annual shareholder meetings, and a right to a share of future profits. When a company pays out profits to the shareholder, the money received is called a "Dividend". The corporation's board of directors choose when to declare a dividend and how much to pay. Most older and larger companies pay a regular dividend, most newer and smaller companies do not.

The average investor buys stock hoping that the stock's price will rise, so the shares can be sold at a profit. This will happen if more investors want to buy stock in a company than wish to sell. The potential of a small dividend check is of little concern. What is usually responsible for increased interest in a company's stock is the prospect of the company's sales and profits going up. A company who is a leader in a hot industry will usually see its share price rise dramatically. Investors take the risk of the price falling because they hope to make more money in the market than they can with safe investments such as bank CD's or government bonds.

What is a stock market index?

In the stock market world, you need a way to compare the movement of the market, up and down, from day to day, and from year to year. An index is just a benchmark or yardstick expressed as a number that makes it possible to do this comparison. For e.g. S&P CNX Nifty is the index of NSE and SENSEX is the index of BSE.

The price per share, like the market cap, has nothing to do with how big a company is.

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The Securities Market consists of two segments, viz. Primary market and Secondary market. Primary market is the place where issuers create and issue equity, debt or hybrid instruments for subscription by the public; the Secondary market enables the holders of securities to trade them. Secondary market essentially comprises of stock exchanges, which provide platform for purchase and sale of securities by investors. In India, apart from the Regional Stock

Exchanges established in different centers, there are exchanges like the National Stock Exchange (NSE) and the Over the Counter Exchange of India (OTCEI), who provide nation wide trading facilities with terminals all over the country. The trading platform of stock exchanges is accessible only through brokers and trading of securities is confined only to stock exchanges.

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Corporate Securities:
The no of stock exchanges increased from 11 in 1990 to 23 now. All the exchanges are fully computerized and offer 100% on-line trading. 9644 companies were available for trading on stock

exchanges at the end of March 2002. The trading platform of the stock exchanges was accessible to 9687 members from over 400 cities on the same date.

Derivatives Market:
Derivatives trading commenced in India in June 2000. The total exchange traded derivatives witnessed a volume of Rs. 442,343 crore during 2002-03 as against Rs. 4018 crore during the preceding year. While NSE accounted for about 99.5% of total turnover, BSE accounted for about 0.5% in 2002-03. The market witnessed higher volumes from June 2001 with introduction of index options, and still higher volumes with introduction of stock options in July 2001. There was a spurt in volumes in November 2001 when stock futures were introduced. It is believed that India is the largest market in the world for stock futures.

Supply and Demand

A stock's price movement up and down until the end of the trading day is strictly a result of supply and demand. The SUPPLY is the number of shares offered for sale at anyone one moment. The DEMAND is the number of shares investors wish to buy at exactly that same time. What a share of a
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company is worth on anyone day or at any one minute, is determined by all investors voting with their money. If investors want a stock and are willing to pay more, the price will go up. If investors are selling a stock and there aren't enough buyers, the price will go down Period.

Secondary Market Intermediaries

Stock brokers, sub-brokers, portfolio managers, custodians, share transfer agents constitute the important intermediaries in the Secondary Market. No stockbrokers or sub-brokers shall buy, sell or deal in securities unless he holds a certificate of registration granted by SEBI under the Regulations made by SEBI ion relation to them. The Central Government has notified SEBI (Stock Brokers & Sub-Brokers) Rules, 1992 in exercise of the powers conferred by section 29 of SEBI Act, 1992. These rules came into effect on 20th August, 1992.

Trading Through Brokers / Traditional Method of Share Trading:Trading in the stock exchange can be conducted only through member broker in securities that are listed on the respective exchange. Investor intending to buy/sell securities in the exchange has to do so only through a SEBI registered broker/sub-broker. This is very popular concept in India for Share Trading before the facilities like on line trading introduce.

Both the exchange have switched over from the open outcry trading system to fully automated computerized mode of trading knows as Bolt and Neat. In this system, the broker trade with each other through the computer network. Buyers and sellers place their orders specifying the limits for quality and price. Those that are not matched remain on the screen and is opened for future matching

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during the day / settlement. After the advent of computerized trading the speed of trading has increased multi-fold and a fuller view of the market is available to the investors. To start dealing with broker you have to fill a form with the broker. After fill all the formalities the firm gives you a User Id no like a bank a/c no. through which you can enter in the transaction with broker. Broker will gives all the which one investor needed.

What is stock Broker?

A stock broker is one who invests other peoples money until its all gone. -Woody Allen, American Film Maker

A stock broker is a person or a firm that trades on its clients behalf, you tell them what you want to invest in and they will issue the buy or sell order. Some stock brokers also give out financial advice that you a charged for. It wasnt too long ago and investing was very expensive because you had to go through a full service broker which would give you advice on what to do and would charge you a hefty fee for it. There are three different types of stock brokers.

1. Full Service Broker - A full-service broker can provide a bunch of services such as investment research advice, tax planning and retirement planning. rate but

2. Discount Broker A discount broker lets you buy and sell stocks at a low doesnt provide any investment advice.

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3. Direct-Access Broker- A direct access broker lets you trade directly with the electronic communication networks (ECNs) so you can trade faster. Active traders such as day traders tend to use Direct Access Brokers

No. of stock broker in India

9368:- Total no of share broker in the country 12687:- The no. of sub-broker. 46%:- The share of trades accounted for by NSE broker 90%: The share of On line trades clocked by segments top five companies

Generally there are two types of trading have been done in India which is given below: On line Trading / E Broking / Modern Method

Trading through Brokers / Traditional method of Share trading.

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COMPANY PROFILE:
ABOUT NIRMAL BANG

INTRODUCTION:Nirmal Bang Group is one of the largest retail broking house in India, providing the investors state of art services in capital markets in the country. The Group has memberships of Bombay Exchange Limited, National Stock of India Limited, Multi Commodity Exchange of India Limited, National Commodity and Derivatives Exchange Limited and is also a depository participant of NSDL and CDS (I) L, the depositories of the country. They started in 1986 under Late Shri Nirmal Bang as sub brokers but have grown steadily and progressively since then. Their clients had contributed tremendously to their growth they recognize and applaud that, they value their relationship with the customers and for their convenience had all investing avenues under one roof.

NIRMAL BANG consultant:

NIRMAL BANG believe that they were best positioned to venture into that activity as a Depository Participant. They were one of the early entrants registered as Depository Participant with NSDL (National Securities Depository Limited), the first Depository in the country and then with CDSL (Central Depository Services Limited). Today, It service over 1Lac customer accounts in this business spread across over 350 cities/towns in India and are ranked amongst the largest Depository Participants in the country. With a growing secondary market presence. It has transferred this business to NIRMAL BANG SECURITIES PRIVATE LIMITED (NBSPL), their associate and a member of NSE, BSE, MCX & NCDEX.

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Business Focus:
The focus of the business is the Customer Customer service, Customer education, Customer support, Customer relations and last but not the least Customer acquisition. Trade execution transparency, timely settlements, risk monitoring and superior service shall have topmost priority, in the best interests of all concerned.

VISION STATEMENT TO CREATE VALUABLE RELATIONSHIP AND PROVIDE THE BEST FINANCIAL
SERVICES MOST PROFESSIONALLY

MISSION STATEMENT
TO WORK TOGETHER WITH INTEGRITY & MAKE OUR CUSTOMER FEEL VALUED

RESPECT OUR COLLEAGUE AND THE BUSINESS ITSELF

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Board of Directors Of NIRMAL BANG GROUP

NAME

POSITION

Mr. Dilip M. Director Bang

Mr. Kishor M. Director Bang

Mr.Rakesh Bhandari Mr.

Chartered Accountant

Deepak Chartered Accountant

Agarval Mr.Suvinay Sharma Mr.Naresh Samdani Mr. Patel Mr. Jain Mr.Anup Agarval Chartered Accountant Sunil Chartered Accountant Deepak Chartered Accountant Chartered Accountant Chartered Accountant

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Principal Activities Of NIRMAL BANG GROUP

NIRMAL BANG Securities Private Limited

Member : National Stock Exchange of India Limited Member : Bombay Stock Exchange Limited Participant : National Securities Depository Limited Participant : Central Depository Service (India) Limited

NIRMAL BANG Commodities Private Limited

Member - Multi Commodity Exchange of India Limited Member - National Commodities and Derivatives Exchange Ltd.

BANG Equity Broking Private Limited

Member - Bombay Stock Exchange Ltd

Nadi Finance & Investment Private Limited

RBI registered Non Banking Finance Company

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Publications of NIRMAL BANG

NIRMAL BANG- Beyond Market

NIRMAL BANG Profile REGISTERED OFFICE

"NIRMAL BANG HOUSE" 38, Khatau Building, 2nd Floor, Alkesh Dinesh Modi Marg, Fort, Mumbai - 400 001, Maharashtra.

NEW DELHI Branch

Flat No. 120, 1st Floor, New Delhi House, 27 Barakhamba Road, Cannaught Place, New Delhi - 110 001.

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Organization Chart:
Nirmal Bang

Branch

Franchise

Web Dealer

Sales Executive Customer Care Receptionist

Sales Coordinator

Account Head

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SWOT Analysis

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Strength: 23 years of research and broking experience Understandings of the markets All financial needs under one roof Scalable and robust infrastructure Full fledge research unit comprising of both fundamental & technical research Dedicated, Qualified and Loyal staff Flexible Brokerage charges

Weakness: Low Brand Image in the market. Low Professionalism Low Advertisements

Opportunity: Large potential market for delivery and intra-day transactions. Open interest of the people to enter in to stock market for investing Attract the customers who are dissatisfied with other brokers & DPs. Up growing markets in commodity and forex trading

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Threats: Decreasing rates of brokerage in the market. A Increasing competition against other brokers & DPs. Poor marketing activities for making the company known among the customers. A threat of loosing clients for any kind of weakness of the company. An Indirect threat from instable stock market, i.e., low/no profit of NIRMAL BANG's clients would lead them to go for other broker/DP.

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Nirmal Bang Commodities:

Nirmal Bang Commodities is founded in the year 1986 by ShriNirmal Bang, the Nirmal Bang Group is recognized as one of the largest retail broking houses in India, providing an array of financial products and services. Their retail and institutional clients have access to products such as equities, derivatives, commodities, currency derivatives, mutual funds, IPOs, insurance, depository services and PMS. It is amongst the top 10 Brokerage house in the country in terms of branches and amongst top 15 brokerage houses by trading volume. It is the member of all principal stock and commodity exchanges in the country.

The group is headed by Mr. Dalip Bang & Kishore Bang, who bring forward industry expertise, insight & most importantly, create an environment of unmatched commitments to client. Our greatest asset drawn from a diversity of professional backgrounds, their blend of experience, skill and dedication is shared with all our clients.

The firms online trading and investment site - www.nirmalbang.com which allows the users to get access through the various services available like stock quotes, NB Research etc. and it also publishes its fortnightly magazine named BEYOND MARKET.

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Some key steps of the company :

Success mantras of Nirmal Bang Commodities:-

The success story of the company is driven by their greatest asset. Drawn from a diversity of professional backgrounds, their blend of experience, skill and dedication is shared with all our clients.

Vision of Nirmal Bang Commodities:-

To create valuable relationships And Provide the best financial services most professionally.

Mission statement:
Innovative and enthusiastic. We emphasize adequate, thorough research local and world-wide developments, balancing these with the astute discovery of intrinsic values, synergies and growth. To Double the market share in retail Equity & Commodity broking market. To Increase the trading turnover. To expand the network of our branches. To Target foreign institutional business and achieve significant volume of the total volume in the industry. To provide international commodity trading platform. To Provide high speed hassle free services to clients by using latest technology.

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As the project is on the

COMMODITY; COPPER,

it is necessary to know the terms and

the exchange on which it is traded. The details are given as below-

Commodity futures are standard futures contract, which are exchange traded; these contracts have their respective commodity as its underlying asset and derive the dynamics from it. Such contracts allow the participant to buy and sell a certain commodity at a certain traded price for future delivery.

A commodity futures contract is generally leveraged giving opportunity for all types of investors to enter. Typically such a contract has an expiry and delivery attached with it. Commodity futures are stable speculative instruments and also a good portfolio diversifier.

India has a long history of commodity futures trading. The cotton exchange at Bombay, Bombay Cotton Exchange, was the first institution to operate the cotton contract in 1921. However, after 1940s, futures trading faced rough weather because of the Governments urge to control inflation. But the situation has undergone a lot of change since then. For over three decades since mid 1960s, the commodity traders in the country had been demanding resumption of futures trading in major farm commodities and their products. With the gradual withdrawal of the government from various sectors in the post-liberalization era, the need has been felt that various operators in the commodities market be provided with a mechanism to hedge and transfer their risks. India's obligation under WTO to open agriculture sector to world trade would require futures trade in a wide variety of primary commodities and their products to enable diverse market functionaries to cope with the price volatility prevailing in the world markets. At preent the futures contracts for period up to six months are being traded in a variety of commodities. Futures trade is allowed in items like gold, silver, copper, crude oil, wheat, pulses, pepper, castor oil, sugar, soybean, coffee, etc.

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COMMODITY MARKET:

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Introduction to Commodity Market:

What is Commodity?
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. Indian Forward Contracts (Regulation) Act (FCRA), 1952 defines goods as every kind of movable property other than actionable claims, money and securities. In current situation, all goods and products of agricultural (including plantation), mineral and fossil origin are allowed for commodity trading recognized under the FCRA. The national commodity exchanges, recognized by the Central Government, permits commodities which include precious (gold and silver) and non-ferrous metals, cereals and pulses, ginned and un-ginned cotton, oilseeds, oils and oilcakes, raw jute and jute goods, sugar and gur, potatoes and onions, coffee and tea, rubber and spices. Etc.

What is a commodity exchange?

A commodity exchange is an association or a company or any other body corporate organizing futures trading in commodities for which license has been granted by regulating authority.

What is Commodity Futures?

A Commodity futures is an agreement between two parties to buy or sell a specified and standardized quantity of a commodity at a certain time in future at a price agreed upon at the time of entering into the contract on the commodity futures exchange.

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The need for a futures market arises mainly due to the hedging function that it can perform. Commodity markets, like any other financial instrument, involve risk associated with frequent price volatility. The loss due to price volatility can be attributed to the following reasons:

Consumer Preferences: - In the short-term, their influence on price volatility is small since it is a slow process permitting manufacturers, dealers and wholesalers to adjust their inventory in advance.

Changes in supply: - They are abrupt and unpredictable bringing about wild fluctuations in prices. This can especially noticed in agricultural commodities where the weather plays a major role in affecting the fortunes of people involved in this industry. The futures market has evolved to neutralize such risks through a mechanism; namely hedging.

The objectives of Commodity futures:

Hedging with the objective of transferring risk related to the possession of physical assets through any adverse moments in price. Liquidity and Price discovery to ensure base minimum volume in trading of a commodity through market information and demand supply factors that facilitates a regular and authentic price discovery mechanism.

Maintaining buffer stock and better allocation of resources as it augments reduction in inventory requirement and thus the exposure to risks related with price fluctuation declines. Resources can thus be diversified for investments.

Price stabilization along with balancing demand and supply position. Futures trading leads to predictability in assessing the domestic prices, which maintains stability, thus safeguarding against any short term adverse price movements. Liquidity in Contracts of the commodities traded also ensures in maintaining the equilibrium between demand and supply.

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Flexibility, certainty and transparency in purchasing commodities facilitate bank financing. Predictability in prices of commodity would lead to stability, which in turn would eliminate the risks associated with running the business of trading commodities. This would make funding easier and less stringent for banks to commodity market players.

STRUCTURE OF COMMODITY MARKET IN INDIA:

Ministry of Consumer Affairs

FMC (Forward Market Commission)

Commodity Exchange

National Exchange

Regional Exchange

NCDEX

MCX

NMCE

NBOT

20 other regional exchanges

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NCDEX:
National Commodity & Derivatives Exchange Limited (NCDEX) is a professionally managed online multi commodity exchange. NCDEX is the only commodity exchange in the country promoted by national level institutions. This unique parentage enables it to offer a bouquet of benefits, which are currently in short supply in the commodity markets. The institutional promoters of NCDEX are prominent players in their respective fields and bring with them institutional building experience, trust, nationwide reach, technology and risk management skills. The NCDEX Platform National Commodity & Derivatives Exchange Limited (NCDEX), a national level online multicommodity exchange, commenced operations on December 15, 2003. The Exchange has received a permanent recognition from the Ministry of Consumer Affairs, Food and Public Distribution, Government of India as a national level exchange. The Exchange, in just over two years of operations, posted an average daily turnover (one-way volume) of around Rs 4500- 5000 crore a day (over USD 1 billion). The major share of the volumes come from agricultural commodities and the balance from bullion, metals, energy and other products. Trading is facilitated through over 850 Members located across around 700 centers (having ~20000 trading terminals) across the country. Most of these terminals are located in the semi-urban and rural regions of the country. Trading is facilitated through VSATs, leased lines and the NCDEX is a public limited company incorporated on April 23, 2003 under the Companies Act, 1956. It obtained its Certificate for Commencement of Business on May 9, 2003. It has commenced its operations on December 15, 2003. NCDEX is a nation-level, technology driven de-mutualized on-line commodity exchange with an independent Board of Directors and professionals not having any vested interest in commodity markets. It is committed to provide a world-class commodity exchange platform for market participants to trade in a wide spectrum of commodity derivatives driven by best global practices, professionalism and transparency. NCDEX is regulated by Forward Market Commission in respect of futures trading in commodities. Besides, NCDEX is subjected to various laws of the land like the Companies Act, Stamp Act,

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Contracts Act, Forward Commission (Regulation) Act and various other legislations, which impinge on its working.

NCDEX is located in Mumbai and offers facilities to its members in more than 550 centres throughout India. The reach will gradually be expanded to more centres. Shareholders of NCDEX :

NCDEX is promoted by a consortium of four institutions. These are National Stock Exchange (NSE), ICICI Bank Limited, Life Insurance Corporation of India (LIC) and National Board for Agriculture and Rural Development (NABARD). Later on their shares were diluted and more institutions became shareholders of NCDEX. These are Canara Bank, CRISIL Limited, Indian Farmers Fertilisers Cooperative Limited (IFFCO), Punjab National Bank (PNB), Goldman Sachs, Intercontinental Exchange (ICE) and Shree Renuka Sugars Ltd. All the ten shareholders (now ICICI is not a shareholder of NCDEX) bring along with them expertise in closely related fields such as agriculture, rural banking, co-operative expertise, risk management, intensive use of technology, derivative trading besides institution building expertise.

Commodities Traded on NCDEX :

NCDEX gives priority to commodities that are most relevant to India, and where the price discovery process takes place domestically. The products chosen are based on certain criteria such as price volatility, share in GDP, correlation with global markets, share in external trade, warehousing facilities, traders distribution, geographical spread, varieties etc. List of commodities offered for futures trading on NCDEX are : SPICES Pepper chilli jeera OIL AND OIL SEEDS Caster seeds Sesame seeds Cotton seed oilcake PRECIOUS METALS Gold Silver Platinum

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turmeric coriander CEREALS

Soy bean Refined soy oil

METALS Steel

Soybean meal(local and Copper export)

Wheat Barley

Mustard oil Kachhighani mustard oil

Zinc Aluminium

Rapseed- mustard seed Nickel Maize(yellow/red) oilcake PULSES Chana Masoor Yellow peas OTHERS Crude palm oil RBD Palmolein Groundnut in shell Groundnut expeller oil PLANTATION PRODUCT Guar seeds Potato Rubber Coffee-Robusta AB Mentha Oil Guar Gurr CER Gur Cashew POLYMERS Polypropylene Linear low Indian 28.5 mm cotton V 797 Kapas Medium staple cotton density Kapas Natural Gas cherry FIBRES ENERGY Crude Oil Furnace Oil Thermal Coal Brent crude oil

polyethylene Almond Polyvinyl Chloride Raw Jute

NOTE- Currently, rice, sugar, urad and tur are de-listed(as on 1 April 2010)

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Leading five commodities traded on NCDEX:

200607 Guar Seeds silver chana chana gold pepper Refined Oil silver gold silver pepper chana jeera Guar Seeds Soy Soybean seeds turmeric jeera Guar Seeds Guar Seeds Guar Seeds RM Seeds 2007-08 2008-09 2009-10 2010-11

Refined urad Soy Oil chana Guar gum

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MCX:
MCX stands of MULTI-COMMODITY EXCHANGE. MCX an independent and de-mutualized multi commodity exchange has permanent recognition from Government of India for facilitating online trading, clearing and settlement operations for commodity futures markets across the country. Key shareholders of MCX include Financial Technologies (I) Ltd., State Bank of India (Indias largest commercial bank) & associates, Fidelity International, National Stock Exchange of India Ltd. (NSE), National Bank for Agriculture and Rural Development (NABARD), HDFC Bank, SBI Life Insurance Co. Ltd., Union Bank of India, Canara Bank, Bank of India, Bank of Baroda and Corporation Bank. Headquartered in Mumbai, MCX is led by an expert management team with deep domain knowledge of the commodity futures markets. Through the integration of dedicated resources, robust technology and scalable infrastructure, since inception MCX has recorded many first to its credit. Inaugurated in November 2003 by ShriMukeshAmbani, Chairman & Managing Director, Reliance Industries Ltd, MCX offers futures trading in the following commodity categories: Agri Commodities, Bullion, Metals- Ferrous & Non-ferrous, Pulses, Oils & Oilseeds, Energy, Plantations, Spices and other soft commodities. MCX has built strategic alliances with some of the largest players in commodities eco-system, namely, Bombay Bullion Association, Bombay Metal Exchange, Solvent Extractors' Association of India, Pulses Importers Association, ShetkariSanghatana, United Planters Association of India and India Pepper and Spice Trade Association. Today MCX is offering spectacular growth opportunities and advantages to a large cross section of the participants including Producers / Processors, Traders, Corporate, Regional Trading Centers, Importers, Exporters, Cooperatives, Industry Associations, amongst others MCX being nation-wide commodity exchange, offering multiple commodities for trading with wide reach and penetration and robust infrastructure, is well placed to tap this vast potential.

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Following diagram gives a fair idea about working of the Commodity market :

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FINDINGS:
1.The level of awareness among the investors about Nirmal Bang is very low

2.Most of the investors are businessman, the tendency of investing is much high among the businessmen than those involved in service.

3.Most of the investors are invest their money from Kotak securities, Sharekhan, MotilalOswal and very few of them are known about Nirmal Bang securities pvt.ltd.

4. The most popular source of information about the market among the investors are television and newspaper followed by internet and business magazines. 5. People are reluctant to invest in commodities apart from Gold, Silver etc. This is due to the lack of knowledge about the other commodities in them.

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INTERNSHIP ACTIVITY:
COPPER:
Copper was the first mineral that man extracted from the earth and along with tin give rise to Bronze Age. As the ages and technology progressed, the uses of copper increased. With the increased demand, exploration of the metal was extended throughout the world laying down the foundations of the industry as we know it today. The diagram below shows the copper value chain.

Copper value chain:

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World copper production

Region Asia:

% 43

America:

32

Europe:

19

Africa:

Oceania:

Total:

100

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Industrial consumption

Industry

Electrical/Electronic Construction Transportation

42 28 12

Consumer/General

Industrial mach.

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Characteristics of Copper
Copper ranks third in world metal consumption after steel and aluminum. It is a product whose fortunes directly reflect the state of the world's economy.Copper is the best non-precious metal conductor of electricity. The metal's exceptional strength, ductility, and resistance to creeping and corrosion, makes it the preferred and safest conductor for building wiring. Copper is also used in power cables, either insulated or uninsulated, for high, medium and low voltage applications. Copper is an essential component of energy efficient motors and transformers and automobiles.

APPLICATION:
The global demand for copper continues to grow; world refined copper usage has Surged by around 300% in the last 50 years owing to expanding sectors such as electrical and electronic products, building construction, industrial machinery and equipment, transportation equipment, and consumer and general products. Coppers chemical, physical, aesthetic properties make it a material of choice in high technology applications. Since copper is biostatic, that is bacteria does not grow on its surface, it is also used in air conditioning systems, and as an anti-germ surface in hospitals.

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copper usage- 2009

construction 33% electrical and electronic products 33% Industrial machinery 12% transport 11% consumer products 11%

Supply and Demand :

Copper mine production was up nearly 2% from 15.805 million MT in 2009 to 16.099 million MT in 2010. In 2010, global refined copper production was 19.186 million MT, up from 18.653 million MT in 2009, and global refined copper consumption was 19.200 million MT,compared with 18.243 million MT in the previous year. After substantial surpluses in 2008 and 2009, when it had seen an oversupply of 343,000 MT and 410,000MT respectively, the global copper market witnessed deficit of 14000 MT in 2010.

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Global Scenario
Economic, technological and societal factors influence the supply and demand of copper. As society's need for copper increases, new mines and plants are introduced and existing ones expanded. Land-based resources are estimated at 1.6 billion tons of copper, and resources in deep-sea nodules are estimated at 0.7 billion tons. The global production of refined copper is around 15 million tons While Chile accounts for 34% of the total world copper mine production, Peru, USA, China, Australia and Indonesia, together are responsible for around 32%. Growth in refined copper usage has been expecially strong in Asia where demand has expaned more than 5-fold in less than 30 years. Major refined copper exporting countries are Chile, Zambia, Japan, Russia and Peru.

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Indian Scenario:
Indias production of refined copper is approximately around 4% of the total world production and in terms of figures it is around 600,000 MT Birla Copper, Sterilite Industries are two major private producers and Hindustan Copper Ltd the public sector producers. India is emerging as net exporter of copper from the status of net importer on account of rise in production by three companies. Copper goes into various usage such as Building, Cabling for power and telecommunications, Automobiles etc. Two major states owned telecommunications service providers; BSNL and MTNL consume 10% of country's copper production. Growth in the building construction andautomobile sector would keep demand of copper high.

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World Copper Markets:

LME and NYMEX are the two international markets, which provide direction to the copper prices. The eight leading refining nations, viz., United States,Japan, Chile, Canada, Zambia, Belgium, and the Federal Republic of Germany account for 67% of total refined metal production. Factors Influencing Copper Markets Copper prices in India are fixed on the basis of the rates that rule on the international stock market, and rupee and US dollar exchange rates. Economic events such as national industrial growth, global financial crisis, recession, and inflation affect metal prices. Commodity-specific events such as the construction of new production facilities or processes, new uses or the discontinuance of historic uses, unexpected mine or plant closures (natural disaster, supply disruption, accident, strike, and so forth). Or industry restructuring, all affect metal prices. Government set trade policy (implementation or suspension of taxes, penalties and quotas) that affect supply by regulating (restricting or encouraging) material flow. Geopolitical events involving governments or economic paradigms and armed conflict can cause major changes.

IMPORTANT GLOBAL EXCHANGES :

EXCHANGE LME PRODUCT GRADE LOT SIZE(MT) A 25 IST 6:30 TO 00:30*

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CATHODES SHANGAI FUTURES EXCHANGE (SHFE) COMEX GRADE ELECTROLYTIC COPPER MCX GRADE ELECTROLYTIC COPPER 1 1 1 25000 POUND STANDARD COPPER CATHODES 5

17:10 TO 22:40** 6:30 TO 9:00 11:30 TO 13:30

18:00 17:15***

TO

10:00 TO 23:30# (MON-FRI) 10:00 14:00(SAT) TO

* LME SELECT

** LME Ring timing (start time- ring session, end time- kerb trading) # day light timing 100:00 to 23:55

*** ET: NY

Time- electronic trading.

COPPER SPECIFICATIONS:

SYMBOL Description Trading period Trading session

COPPER COPPER MMMYY MONDAY TO SATURDAY MONDAY TO FRIDAY- 10:00 TO 23:30. SATURDAY 10:00 TO 14:00

Contract Months Expiry date Trading unit Quotation/base value Tick size Maximum order size Daily price limit

Bi- monthly contracts Last day of the month 1 MT RS/PER KG 5 Paise per kg 70 MT 4%

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Initial margin

Minimum 5 % or based on SPAN whichever is higher

Special margin

In case of additional volatility, a special margin at such percentage, as deemed fit; will be imposed immediately on both buy and sale side in respect of all outstanding position, which will remain in force till volatility persists, after which the special margin will be relaxed.

Maximum allowable open position

FOR INDIVIDUAL CLIENTS :- 5000 MT For a member: 25000 MT or not more than 15% of the market-wide open position, whichever is higher.

Delivery logic Delivery center

Both options Within 20 km outside Mumbai octroi limit.

Delivery unit

9MT with tolerance limit of +/-% (90kg)

Due date rate (DDR) calculation

Due date rate is calculated on the last day of the contract expiry, by taking international spot price of copper and it would be multiplied by Rupee US$ rate as notified by the Reserve Bank Of India.

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STUDY OF COPPER PRICES AS COMPARED TO GOLD:

As per the recent study of copper and gold prices, we can observe a lot of fluctuation in the prices of both. The downgrade of the US sovereign debt by Standard and Poors to AA+, from the decadesuntouched rating of AAA, has given another shot in the arm to already rising gold price. As per the recent data, the gold price touched Rs.26,000 per 10 grams. On the other hand, the prices of copper has fall down to Rs.403. copper prices act as a strong indicator of economic growth.

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ASSESSMENT OF THE INTERNSHIP:

QUESTIONNAIRE:
Analysis of Commodity Market (Survey) Name . Age . Mail id ..Gender .

Q.1 In which sector do you work? a) Government b) Self employed e) Other c) Private d) Business

Q.2 What is your current Annual Income (in Rs)? a) Below 200000 b) 200000-400000 c) 400000-800000 d) Above 800000

Q.3 What percentage of your income do you invest? a) Below 10% b) 10-25% c) 25-50% d) Above 50%

Q.4 Please specify the investment pattern. a) Short-term b) Mid-term c) Long-term d) Mix
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Q.5 Do you invest in Commodity market? a) Yes b) No

If yes, then refer to questions no. 6 to 9 If no.then refer to question no. 10

Q.6 In which Commodity exchange do you transact? a) MCX b) NCDX c) NSEL d) Others (Please Specify)

Q.7 In which segment did you transact? a) Natural Metals (Copper, Natural Gas) b) Base Metals (Lead, Zinc) c) Precious Metals (Gold, Silver) d) Agro commodities (Potato, Pepper, Soybean)

Q.8 Since how long you been investing in commodity market? a) Less than 1 year b) 1-2 years c) 2-3 years d) Above 3 years

Q.9Whom do you prefer to deal with while trading in commodity market? a) Brokers b) Online c) Sub brokers d) All

Q.10 Would you like to invest in commodity market in near future? a) Yes b) No
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If yes, then refer to questions no. 11 to 13

Q.11 Rate the following attributes which influence your decision in choosing a Brokerage House on the scale of 1 to 5 1 (Least 2(Less 3 (Neutral) 4(More Preferred) 5 (Most

Preferred) Preferred) Customer Service Proper Guidance Regular Updates Trustworthiness Brokerage Charges

Preferred)

Q.12 In which segment did you want to transact? a) Natural Metals (Copper, Natural Gas) b) Base Metals (Lead, Zinc) c) Precious Metals (Gold, Silver) d) Agro commodities (Potato, Pepper, Soybean)

Q.13 Which Commodity exchange do you prefer for your investment? Ans. .

Q.15 Do you know anything about NIRMAL BANG Pvt. Ltd.? a) Yes b)No

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ANALYSIS OF THE QUESTIONAIRE:

Q.1: In which sector do you work? SECTOR OF RESPONDENTS Valid Frequency Percent Percent GOVERNMENT 20 SELF EMPLOYED PRIVATE BUSINESS OTHERS Total 55 10 5 100 55.0 10.0 5.0 100.0 55.0 10.0 5.0 100.0 85.0 95.0 100.0 10 20.0 10.0 20.0 10.0 Cumulative Percent 20.0 30.0

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Inference:From the above graph it has been shown that out of 100 respondents, More than half of the respondents were working in private sector & the rest of the respondents were apportioned in different sectors.

Q.2: What is your current Annual Income (in Rs)? INCOME OF RESPONDENTS Valid Frequency Percent Percent 200000400000 400000800000 ABOVE 800000 Total 100 100.0 100.0 10 10.0 10.0 100.0 40 40.0 40.0 90.0 50 50.0 50.0 Cumulative Percent 50.0

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Inference : From the above graph, it has been shown that out of 100 respondents 50 % of the respondents lie in the income category of 200000-400000, 40 % lie in the category of 400000-800000 & only 10 % of the respondents having income of more than 800000.

Q.3: What percentage of your income do you invest?

INCOME TO INVESTMENT RATIO Valid Frequency Percent Percent BELOW 10% 10-25% 25-50% ABOVE 50% Total 100 100.0 100.0 30 15 5 30.0 15.0 5.0 30.0 15.0 5.0 80.0 95.0 100.0 50 50.0 50.0 Cumulative Percent 50.0

Inference:

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From the above graph it has been shown that out of 100 respondents, half of the respondents i.e. 50% invest less than 10% of their income, 30% fall in the category of 10-25% & 5% of the respondents invest more than 50% of their income. This shows that peoples working in government sector would have the tendency to invest more of their income.

Q.4: Please specify the investment pattern.

INVESTMENT PATTERN OF RESPONDENTS Valid Frequency Percent Percent SHORT TERM MID TERM 35 35.0 35.0 20.0 100.0 35.0 35.0 20.0 100.0 45.0 80.0 100.0 10 10.0 10.0 Cumulative Percent 10.0

LONG TERM 35 MIX Total 20 100

Inference:
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From the above graph it has been shown that only 10% of the respondents prefer short-term investments, 35% each respondents prefer mid-term &long term investment pattern and the rest

20% prefer the mixture of all. This shows that around one-third of the respondents done their investment for the future contingencies.

Q.5: Do you invest in Commodity market? DO YOU INVEST IN COMMODITY MARKET Valid Frequency Percent Percent YES NO 20 80 20.0 80.0 100.0 20.0 80.0 100.0 Cumulative Percent 20.0 100.0

Total 100

Inference:

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From the above graph, it has been shown that only 20% of the respondents prefer to invest in commodity market as their investment, this shows the less awareness of the respondents towards commodity market. Government agencies & NGO should do some seminars/conferences to educate the investors about commodity market.

Q.6: In which Commodity exchange do you transact? IN WHICH COMMODITY EXCHANGE DO YOU TRANSACT Valid Frequency Percent Percent MCX DO NOT INVEST Total 100 100.0 20 80 20.0 80.0 100.0 Cumulative Percent 100.0

Inference: From the above table, it has been shown that out of 100 respondents, only 20% of the investors invest in commodity market & out of 20 investors who invest in commodity market all of the 20 investors invest in MCX.

Q.7: In which segment did you transact? IN WHICH SEGMENT DID YOU TRANSACT Valid Frequency Percent Percent PRECIOUS METALS DO NOT INVEST 80 Total 100 80.0 100.0 20 20.0 100.0 Cumulative Percent 100.0

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Inference: From the above table, it has been shown that out of 100 respondents, only 20% of the investors invest in commodity market & and all the investors invest in only one segment i.e. Precious metals (Gold, Silver). This is because of the return in the gold & silver future market.

Q.8: Since how long you been investing in commodity market?

HOW LONG YOU BEEN INVESTING IN COMMODITY MARKET Valid Frequency Percent Percent LESS THAN 1 5 YR 1-2 YR 2-3 YRS 5 5 5.0 5.0 5.0 20.0 80.0 25.0 25.0 25.0 100.0 50.0 75.0 100.0 5.0 25.0 Cumulative Percent 25.0

ABOVE 3 YRS 5 Total DO INVEST Total 100 20 NOT 80

100.0

Inference:

From the above table, it has been shown that out of 100 respondents, only 20% of the investors invest in commodity market & out of 20 investors who invest in commodity market, 25% of the respondents fall in each of the category i.e. 25% of respondents have been investing in commodity market from less than 1 year, 25% from 1-2 year, 25% from 2-3 year & the rest 25% have been investing in commodity market from more than 3 years.

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Q.9: Whom do you prefer to deal with while trading in commodity market?

PREFER TO DEAL WHILE DEAL IN COMMODITY MARKET Valid Frequency Percent Percent BROKERS ONLIINE SUB BROKERS Total DO INVEST Total 100 100.0 20 NOT 80 20.0 80.0 100.0 10 5 5 10.0 5.0 5.0 50.0 25.0 25.0 Cumulative Percent 50.0 75.0 100.0

Inference: From the above table, it has been shown that only 20% of the investors invest in commodity market out of which 50% of the respondents prefer Brokers for their transactions, 25% of the prefer sub brokers for their transactions & the rest 25% of the respondents have been doing their transactions by their by their own i.e. Online.

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Q.10: Would you like to invest in commodity market in near future?

WOULD YOU LIKE TO INVEST IN COMMODITY MARKET IN FUTURE

Frequenc y YES NO Total 10 70 80

Valid Percent Percent 10.0 70.0 80.0 20.0 12.5 87.5 100.0

Cumulative Percent 12.5 100.0

Already 20 Investin g Total 100

100.0

Would ypu like to invest in commodity market in near future?

Would ypu like to invest in commodity market in near future? 80 70 60 50 40 30 20 10 0 10 0 YES 10% Already invested 20% NO 70% 20 70

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Inference: From the above table, it has been shown that only 12.5% of the respondents would like to invest in commodity market in near future & the rest 87.5% of the respondents would not like to invest in commodity market which clearly reflects the awareness of commodity market in the respondents.

Q.11: In which segment did you want to transact?

IN WHICH SEGMENT DID YOU WANT TO TRANSACT

Natural metals 20% Precious metals 75% Base metals 4% Agro commodities

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CONCLUSION:

After almost two years that commodity trading is finding favor with Indian investors and is been seen as a separate asset class with good growth opportunities in Gold, Silver Copper etc. For diversification of portfolio beyond shares, fixed deposits and mutual funds, commodity trading offers a good option for long-term investors and arbitragers and speculators. And, now, with daily global volumes in commodity trading touching three times that of equities, trading in commodities cannot be ignored by Indian investors.

Online commodity exchanges need to restore certain laws governing futures in commodities to make the markets more attractive. The national multi-commodity exchanges have unitedly proposed to the government that in view of the growth of the commodities market, foreign institutional investors should be given the go-ahead to invest in commodity futures in India. Their entry will deepen and broad base the commodity futures market. As a matter of fact, derivative instruments, such as futures, can help India become a global trading hub for select commodities.

Commodity trading in India is poised for a big take-off in India on the back of factors like global economic recovery and increasing demand from China for commodities. Considering the huge volatility witnessed in the equity markets recently with the Sensex touching 19000 level commodities could add the required zing to investors' portfolio. Therefore, it won't be long before the market sees the emergence of a completely redefined set of retail investors in commodity market too.

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RECOMMENDATION:
Keeping in mind the preference and demand of the people in different locations and studying both channel business model and own branch model and comparing the advantages and disadvantages of the models I would like to provide some suggestions which may help Nirmal Bang to choose proper expansion strategy for the growth of its market share in Eastern Region. Improve the brand awareness of Nirmal Bang by increasing advertisements and promotional activities like performing campaigning programs. This will improve the brand of NirmalBang which will help to attract more clients. Spreading awareness about different types of commodities among the potential buyers would help them to make them trade in the areas not very popular, thus, encouraging small investors to enter into commodity market. Strong database and regular follow- up of it would help them to crate a goodwill among its existing customers. Organizing investors meet at regular interval would be beneficial for their business.

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BIBLIOGRAPHY:

For the preparation of project and other required concepts following websites are consulted for the information

www.nirmalbang.com www.answers.com www.businessstandard.com www.google.com

Following books, magazine and newspapers are also consulted:

1) Business World 2) Business & Economy 3) The Economic Times

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NAME OF STUDENT- MOHAMMED ASIF CONTACT NO. 9911007030 E-MAIL ADRESS- k.asif89@gmail.com ID NO.- D1012FWISBE-A10255(GGN-2B-GA-2038)

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