 "Commexes' turnover remains flat in 2016")
The turnover of the three commodity exchanges increased marginally in 2016, following a sharp volatility in the prices of non-agro commodities.
The turnover of the Multi Commodity Exchange (MCX), National Commodity and Derivatives Exchange (NCDEX) and National Multi Commodity Exchange (NMCE) was Rs 66,66,907 crore in 2016, till December 10, compared to Rs 66,49,640 crore in the previous year.
Since the commodities transaction tax (CTT) was levied on July 1, 2013, the turnover of the commodity exchanges fell 50 per cent compared to the pre-CTT era.
The turnover of the NMCE, at Rs 49,764 crore in 2016 (till December 19), is just short of the minimum of Rs 50,000 crore, set by the regulator. It was Rs 69,464 crore in the previous year. Trade sources, however, have forecast a recovery in 2017.
In 2016, futures trading in castor seeds and chana was suspended, and as a result the turnover of the agri sector declined.
In 2014, the first year after the CTT came into effect, the commexes’ turnover fell almost 50 per cent to Rs 64,74,992 crore from 12,411,548 crore in 2013.
“The demonetisation of high-value currency notes, announced in November, affected the economy. It impacted the commodity exchanges’ volume in December. Traders shied away from the market. Also, the sharp decline in prices of non-agri commodities, coupled with the measures of the government to control the rising prices of pulses, has shackled the futures market. Hence, participants abstained from taking fresh positions in the commodity exchanges,” a senior executive of a broking firm said.
The turnover of the Multi Commodity Exchange (MCX), National Commodity and Derivatives Exchange (NCDEX) and National Multi Commodity Exchange (NMCE) was Rs 66,66,907 crore in 2016, till December 10, compared to Rs 66,49,640 crore in the previous year.
Since the commodities transaction tax (CTT) was levied on July 1, 2013, the turnover of the commodity exchanges fell 50 per cent compared to the pre-CTT era.
The turnover of the NMCE, at Rs 49,764 crore in 2016 (till December 19), is just short of the minimum of Rs 50,000 crore, set by the regulator. It was Rs 69,464 crore in the previous year. Trade sources, however, have forecast a recovery in 2017.
In 2016, futures trading in castor seeds and chana was suspended, and as a result the turnover of the agri sector declined.
In 2014, the first year after the CTT came into effect, the commexes’ turnover fell almost 50 per cent to Rs 64,74,992 crore from 12,411,548 crore in 2013.
“The demonetisation of high-value currency notes, announced in November, affected the economy. It impacted the commodity exchanges’ volume in December. Traders shied away from the market. Also, the sharp decline in prices of non-agri commodities, coupled with the measures of the government to control the rising prices of pulses, has shackled the futures market. Hence, participants abstained from taking fresh positions in the commodity exchanges,” a senior executive of a broking firm said.
Also, apprehensions of stronger regulation after the merger of the Forward Markets Commission (FMC) with the Securities and Exchange Board of India (Sebi) impacted trading sentiment. Thus, the daily average turnover of all commodity exchanges stood at Rs 26,668 crore for 2016 (till December 19), compared to Rs 25,774 crore in 2015.
The MCX focuses primarily on the non-agri segments, with bullion, energy and base metals as its main areas of interest.
“Positive macroeconomic developments have supported industrial commodities. Base metals have seen a good rally in November on the positive manufacturing data and infrastructure spending promises by some large economies. Prices rallied, as sentiment improved on the hope that US President-elect Donald Trump will invest in infrastructure development, which will then result in an increase in demand for base metals,” said Ajay Kedia, managing director, Kedia Commodity.
Meanwhile, the MCX’s market share increased to 89.4 per cent in 2016, against 83.5 per cent in 2015 and 81.3 per cent in 2014. However, the share of the NCDEX declined to its lowest in three years to 9.6 per cent, with a daily average turnover of Rs 2,569 crore, the lowest in six years. The NCDEX posted a turnover of Rs 6,42,356 crore in 2016 (till December 19) compared to Rs 1,027,560 crore in 2015.
The MCX focuses primarily on the non-agri segments, with bullion, energy and base metals as its main areas of interest.
“Positive macroeconomic developments have supported industrial commodities. Base metals have seen a good rally in November on the positive manufacturing data and infrastructure spending promises by some large economies. Prices rallied, as sentiment improved on the hope that US President-elect Donald Trump will invest in infrastructure development, which will then result in an increase in demand for base metals,” said Ajay Kedia, managing director, Kedia Commodity.
Meanwhile, the MCX’s market share increased to 89.4 per cent in 2016, against 83.5 per cent in 2015 and 81.3 per cent in 2014. However, the share of the NCDEX declined to its lowest in three years to 9.6 per cent, with a daily average turnover of Rs 2,569 crore, the lowest in six years. The NCDEX posted a turnover of Rs 6,42,356 crore in 2016 (till December 19) compared to Rs 1,027,560 crore in 2015.