Capital Market and commodity market are the two

sides of the same coin.

Sensex (white) and Crude (red)
 Crude nearing $100 gave good
indication to book profit in Capital
market - sensex at 20000
Crude at $145 lead to high inflation
and is the major reason for pulling
the Sensex below 14000
Gold (white) and Crude (red) going
through a bull phase.
Why we should do commodity in
every branch ?
 Dow Jones Vs Gold Ratio
 1) You will notice when the black line is heading up the Dow Jones is generally outperforming
the price of gold. We shaded the general trend of the Dow Jones bull market in red. From about
1980 to 2000 the Dow Jones was very clearly in a bull market and outperforming the price of
gold. During this time it would be logical to heavily weigh ones investments in the Dow Jones
index.

 2) You will notice that in 2000 the price of gold started to outperform the Dow Jones. In 2000
the Dow Jones gold ratio peaked at about 42 and then started to head lower. This means that in
about 2000 it took 42 ounces of gold to buy one share of the Dow Jones index. But in 2007 it
only takes about 19 ounces of gold to buy one share of the Dow Jones index. In other words,
since 2000 the price of gold has been outperforming the Dow Jones Index. During this time
period it would have made sense to invest in gold. We shaded this area in green.

 3) In a bull market we regularly experience quick price advances followed by a sharp pullback.
This is normal market behavior. This is a lot of short term noise that intimidates, frustrates and
costs many investors a lot of money. Notice the long term dotted trend line we drew on the
graph above. This trend line extends back from about 1980 to about 1995, where the Dow Jones
really took off. This line is significant as it illustrates a major support line for the Dow/Gold Ratio.
Note how in May of 2006 the ratio bounced on the exact same support line that had been started
27 years earlier.
A branch should do both commodity and capital market to meet the
cyclical fall in revenue in one segment. Looking at the international
experience over the past 40 years we can see one market is
performing when the other is underperforming.
 How can we use the commodity market to meet
the brokerage target of a branch?

 How one Branch can

achieve target
Branch A Performance

%
Brokerage Actual Target Achieved

Equity 480770 912000 52.72

Commodity 486161 153000 317.75

Total 966931 1065000 90.79

 Is it difficult to promote global
commodities ?
 Yes. It is difficult to manage due to the high risk
associated with the fluctuating derivative
products. Global economic events have very
close relationship with these products.
 Can we ignore this global events like;
-Inflation
-Interest rates
-Economic data
“NO”
We have to learn to manage risks instead of
avoiding it.
Global Economic data available in your desk top-fxstreet.com-
Give you the details of economic data released globally which has
direct relationship to financial markets.
Go to fxstreet.com ,fundamentals, and click on each
data- for example on continuing jobless claims-we
get the brief description of the data.
 Continuing Jobless Claims (Jun 28)
 Actual: release at 12:30 GMTCons.: n/aPrevious:
3116K (to get IST add 5.30 to GMT=18 hrs/6 PM)
 The Counting Jobless Claims released by the
US Department of Labor measure the number of
individuals who are unemployed and are currently
receiving unemployment benefits. It presents the
strength in the labor market. A rise in this indicator has
negative implications for consumer spending which
discourage economic growth. Therefore, a high reading
is seen as negative, or bearish for the USD, while a low
reading is seen as positive, or bullish.
 GEPL PRODUCTS
 Capital Market
 Distribution
 Commodity
 Derivatives becoming a major
segment.
 In the coming months GEPL will have
Derivatives business as a core income
generating area:
-Capital market Futures and options
-Commodity market Futures and
-Currency Futures.
It clearly means that we have to learn to manage
risk instead of avoiding it. In case we fail to
provide all these products to clients they may
move to competitors offering this facility.
 Distribution and Commodity
 Mirae Asset management has launched a
Global Commodity Fund.

 Why they are launching a commodity

fund ?
 Commodities Follow a long cycle
 In last 130 years there have been 3 long
commodity bull cycles and all they had a
life of over 17-18 years:
-1907-1923 (Great depression in
1930)
-1933-1953
-1968-1982
-1999-2018 ???
We are in the middle of this cycle.
 How to start ?
 You have to learn only 4 products:
Gold, Crude oil, Copper and Silver.

These products are the products which we

use in daily life. So it is easy to learn if you
spend few hours to understand it.
 GEPL’s branch getting 8 additional hours to earn
income (60% more). Capital and commodity market
10 AM-3.30 PM and commodity 3.30 PM to 11.30
PM
Hours

5.3, 40%
Capital & commodity market
Commodity Market
8, 60%
 Can we do investment in gold
through commodity futures ?
 Yes.We can buy gold and hold it in DP.
 We have 3 different contracts in Gold
-Gold Guinea-8 grams gold
-Gold Mini-100 grams gold
-Gold kilo-1000 grams gold.
We can take delivery in all the three
contracts and keep in Dp as a long term
investment.