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MR Narendra Gupta, CBO, NCDEX MR Narendra Gupta, CBO, NCDEX: August 10, 2005
MR Narendra Gupta, CBO, NCDEX MR Narendra Gupta, CBO, NCDEX: August 10, 2005
MR Narendra Gupta, CBO, NCDEX MR Narendra Gupta, CBO, NCDEX: August 10, 2005
47% of GDP is Commodity related 23% of GDP is from Agriculture Over 65% of 1 trillion population depend on agriculture directly Over 7500 physical market yards History of more than 150 years of derivatives trading
Ban in forward trading from mid-sixties Prior to ban Thriving commodity exchanges for cotton, gold, edible oils etc. more than 20 regional commodity specific exchanges Recent developments Ban completely lifted in 2003 Emergence of national level de-mutualised online multicommodity exchanges 3 National and 21 regional exchanges Trade in 60 commodities compared with just 8 in 2000 Growth exceeds 4 times in FY05 over FY04
Parameters considered
Price volatility Share in GDP Correlation with global markets Share in external trade Government intervention Warehousing facilities Traders distribution Geographical spread Number of varieties
Contract Specifications
Linking entire value chain Proxies- Benchmarking to all other varieties Location premium & discount
Challenges ahead
From open outcry to online Discipline trading environment Nuances of Physical settlement Educating about commercial relevance To bring actual users on the exchange platform
Generating liquidity
Involvement of all value-chain entities in contract formulation Relationship group provides relentless momentum
Awareness Programmes
Easy access to Exchange information Market to be opened up for banks, fund houses and Foreign Investors
Foreign Access
Foreign access permitted in securities marketequities & bonds Foreign investment regulation for investment in commodity derivatives a committee constituted by the regulator Currently can access by setting up a domestic entity for broking & investment
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Options trading
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Regulatory Environment
Capital Markets
Securities Exchange Board of India (SEBI) Autonomous body Under Ministry of Finance Forward Markets Commission (FMC) Part of Ministry of Consumer Affairs Law being amended to make it autonomous body
Commodity Markets
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About NCDEX
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15%
15%
12%
12%
15%
15%
8%
8%
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Product Calendar
Dec 2003
Gold, Silver, Crude Palm oil, RBD Palmolein, Cotton, Mustard seed, Mustard oil Soybean, Refined soy oil
Apr-Dec 2004
Guar seed, Jute sacking, Chana, Rubber, Pepper, Wheat, Castor seed, Guar gum, Raw jute, Urad, Yellow peas, Sugar, Turmeric, Soymeal
In pipeline
Other base Metals, Energy Products, More Agricultural products
Rs mn
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ct -N ov 0 4 Q1 -2 0 0 4 Q2 -2 0 0 4 Q3 -2 0 0 4 J u n e '0 5 J u l y '0 5 D e c - '0 4 M a y '0 5 M a r '0 5 A p r '0 5 Fe b '0 5 J a n '0 5
Impressive growth of NCDEX with 85% volume contribution from agriculture Volumes in Steel & Copper picking up- daily average steel trade- 10,000 tonnes
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Thank You
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