Archive for November 25th, 2009

Seasonal Index……“Time is Money” Part 1

Hello Friends here we come up with our another write up on “SMC Gyan Series”

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Seasonal Index……. “Time is Money”

In this Blog, we are going to read more about the old saying  “Time is Money” which is represented quite aptly by SEASONAL INDEX.

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Seasonal Index……. “Time is Money”

The old T saying “Time is Money” is rightly represented by Seasonal Index.

To maximize profit, investors should have good knowledge of markets where demand & supply of commodities have their own seasonality & the future prices of agri contracts with volatile market psychology, triggering stop-loss orders, hitting targets & speculator closing out of positions.

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What is a Seasonal Pattern?

Seasonal Indices are the virtual mirror image & identifiable seasonal movement on commodity data between two dates of the recent past, influenced by general price trend, sentiment, exchange rates etc.


It provides a better way of understanding the repetitive and predictable movement, but one should not be swayed by preconceived ideas about them, as they do not determine the actual signals, but the time of execution instead.

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Reasons for studying seasonal variation :

The reasons for studying seasonal variation are:

· To learn how seasonal forces can affect the commodity market.

· Better understanding of the price movement within a time series.

· To learn how seasonal’s can be used to identify the trade timing of a market.

· Prediction of the future trends & magnitude of price changes.

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Stay Tuned for more on this.

In next blog, we would touch upon the points related to

the analysis of the seasonal pattern of the commodity prices,

how an annual average method can be used to generate a seasonal pattern in predicting the future prices of the commodity,

and seasonal pattern in the year 2009.

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India’s Investment in the US Bonds Stands Lowest Among BRIC Nations

India's Investment in US Bonds Stands Least Among BRIC Nations


India
stands least exposed among the other BRIC nations with respect to their respective foreign exchange reserves.

This is in addition to the recent development where it got evident that India has reduced its investments in US Treasury bonds between May and September.

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India’s investment in the US bonds stands at $35.90 billion as per the latest data released by the US Department of Treasury on November 17, as on September 30.

However, India’s investment in the US bonds is the lowest among all BRIC nations.

China’s investment in the bonds remained the highest at $798.9 billion.

Brazil’s exposure was $144.90 billion, followed by Russia at $121.80 billion.

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In terms of percentage of exposures to the US bonds to each of these economy’s total foreign exchange reserves also, India was the lowest.

India’s exposure to US bonds was 12.81 per cent of its forex reserves of $280.34 billion in September compared with

64.63 per cent of Brazil, 35.15 per cent of China, and 29.46 per cent of Russia.

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India’s forex reserves and US bond investments ratio improved during the period between May and September this year as its forex reserves went up.

In May, the ratio was 14.79 per cent on the forex reserves of $262.31 billion.

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Mr Jagannadham Thunuguntla of SMC Capital said: “With less exposure to US treasury bonds, India stands least vulnerable to US dollar depreciation in comparison to its BRIC peers”.

The current trend showed that though China and Russia too reduced their vulnerability ratio during May-September, Brazil increased it, Mr Thunuguntla said.


Brazil has forex reserves worth $224 billion, while Russia has $413.45 billion.

China has $2,272 billion foreign exchange reserves.

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Futures Trading in Rice, Sugar and Pulses Should be Banned

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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'Futures trading in rice, sugar and pulses should be banned'

‘Futures trading in rice, sugar and pulses should be banned’:

A parliamentary panel today suggested that futures trading should be banned in case of wheat, rice, sugar and some pulses till the country becomes self sufficient in these food items.


The Estimates Committee asked the government to bring a new legislation to control the retail prices of essential commodities like rice,wheat, pulses, edible oils, sugar, milk and vegetables.


On futures trading, the report said: “Since food security of the country is at the stake, the Committee recommends that futures trading in wheat, rice, tur dal, urad dal and sugar should be banned till the country achieves self-sufficiency in the production of these items on a continuous basis”.


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In Other major Commodities Updates we can see exports of Spice declining and on the other hand price of pulses rising up 80% in a year time.

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Spice exports decline 1.3% in April-October:

Exports of spices fell 1.3 per cent in volume and 1.6 per cent in value during the April-October period of the current financial year.


According to the latest estimates of Spices Board, total exports in the period were 280,885 tonnes valued at Rs 3,031.59 crore against 284,560 tonnes valued at 3,080.25 crore in the same period last year.


Pepper exports suffered a serious setback as the figures dropped to 11,500 tonnes valued at Rs 179.16 crore as against 14,750 tonnes valued at Rs 246. 70 crore in the same period last year.


Export of chilli also declined to 100,500 tonnes valued at Rs 706.50 crore as against 121,500 tonnes valued at Rs 660.17 crore.


Coriander exports had a better performance at 25,250 tonnes valued at Rs 128.12 crore against 17,100 tonnes valued at Rs 116.80 crore.

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Pulse prices rise up to 80 per cent in one year:

The government today said prices of pulses have surged by up to 80 per cent in the national capital over the last one year.


While prices of tur have gone up by 80 per cent in the last one year to Rs 90 a kg, that of moong dal surged 74 per cent to Rs 82, according to the data presented by Food and Agriculture Minister Sharad Pawar in a written reply to the Lok Sabha.


Even import of about 16 lakh tonnes of pulses between April and October has not eased pressure on the prices, the data showed.

Not just pulses, prices of sugar have almost doubled to Rs 38 a kg.

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