NCDEX's market share soars to 18% from 11%

The average turnover has moved up 12.39% to Rs 4,157.21 cr since the start of the financial year, compared to the same period last year

At a time when other commodity exchanges are struggling to stay afloat, National Commodity & Derivatives Exchange Limited (NCDEX)'s market share has improved from 11 per cent to 18 per cent in the past year.

NCDEX’s average turnover has also moved up by 12.39 per cent since the start of the financial year, compared to the same period last year, to Rs 4,157.21 crore.

The turnover of the commodity exchange has seen an uptick due to the start of evening trade and after the introduction of smaller-sized futures contracts in agri-commodities such as castor seed and chana (chickpea).

“The exchange has taken several initiatives like strengthening warehousing, introducing innovative products and, most recently, creating the first-of-its kind hedge policy, which have helped in a significant increase in market confidence,” said an NCDEX spokesperson.

On the other hand, both Multi Commodity Exchange (MCX) and National Multi Commodity Exchange (NMCE) witnessed a drop in their market share during the same period. Although MCX still enjoys the market leadership position at 80 per cent, it has seen a fall of five per cent. NCDEX and MCX control the commodity futures business in the country.

NCDEX has become aggressive in the past two months and has been trying to capture the available space in the commodity market. The re-launch of crude oil and the launch of gold hedge contract have started to bring in Rs 300 crore on a daily basis, said Naveen Mathur, associate director (commodities and currencies) at Angel Broking.

Market players attribute the decrease in the turnover of MCX to a number of reasons. The foremost amongst these is the introduction of a commodity transaction tax (CTT) in July 2013, which had an impact on volumes of the exchange, as most of the commodities traded on the exchange came under CTT.

ACE Commodity Exchange also witnessed a rise of 22.6 per cent in its average turnover to Rs 185.40 crore during the same period, while NMCE’s average turnover fell by 83.3 per cent to Rs 164.90 crore.

The introduction of CTT has had an overall bearing on the commodity market, whose average turnover has fallen by 29 per cent in the past year to Rs 22,996.79 crore.