Archive for January 19th, 2010

MCX Comdex & Benefits of Index :)

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

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INDEX - The Measuring Barometer

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Topic is  INDEX – The Measuring Barometer.

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Here, we would read that what is MCX Comdex and what are the advantages of Index.

MCX COMDEX captures diversified sectors encompassing futures contracts drawn on metals, energy and agricultural commodities that are traded on MCX.

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It is the significant barometer for the performance of commodities market and would be an ideal investment tool in commodities market over a period of time.

The MCX COMDEX futures give users the ability to efficiently hedge commodity and inflation exposure and lay off residual risk.

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Protection can be established regardless of overall market direction.

MCX COMDEX, India’s first composite commodity futures index was launched on June 7, 2005.

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Advantage:

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Investors who own stocks of companies having exposure to primary commodities could use the COMDEX as a guide to hedge their risk in the commodity exchange, thereby bringing stability to the financial markets and strengthening linkages.

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Weight age (%) of Commodities in MCX COMDEX:

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On the MCX-COMDEX, Agricultural sub-group carries 20% weighting.

It includes ref. soy oil, potato, chana, crude palm oil, kapaskhali & mentha oil.

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Metals also carry 40% weighting and comprise gold, silver, copper, zinc, aluminium, nickel & lead.

The energy sub-group consists of crude oil & natural gas and carries 40% weighting.

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Weight age (%) of Commodities in MCX COMDEX

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Also Group Indices for MCX AGRI, MCX METAL & MCX ENERGY on commodity futures prices have been developed to represent different commodity segments as traded on the exchange.

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🙂

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EQUITY MARKET OVERVIEW JANUARY 2010

EQUITY MARKET OVERVIEW JANUARY 2010

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The year 2009 was an unconventional year with surprises galore.

The sharp recovery in the benchmark Sensex is evident of the same.

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The year came with some shocks and some surprises, be it Satyam opening the Pandora’s Box, government coming to the rescue through fiscal stimulus or gold touching the new highs.


With appreciation of more than 75%, 2009 calendar year emerged as the best year bringing back hope and strengthening the faith and confidence of investors.

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As we welcome the New Year, let’s have a glance at how was the sunset of 2009 with the happenings in the month of December.


The month started with not much action as the indices were little changed as every rise was seen as an opportunity to book profits as fear of rising inflation barred investors from building large positions.

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The India’s industrial output jumped 11.7% in November 2009 from a year earlier, helped by stimulus measures and robust domestic demand.


The momentum in the country’s industrial output is likely to sustain in the coming months.


The facility for Indian companies to buy back their Foreign Currency Convertible Bonds (FCCBs) under the automatic route and approval route would be discontinued from January 2010 due to the improvement in the equity market.

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The central bank said it would allow non-bank financial companies which are focused on financing infrastructure projects to borrow from overseas markets under the approval route.


During the middle of the month, profit taking pulled the key benchmark indices lower.

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The worst monsoon since 1972 and flood in some parts of the country have pushed up food prices nearly to 17.28% annually in beginning of January, while the headline inflation accelerated to 7.31% in December.


The food supplies need to be boosted to stem the price rise as the current acceleration in inflation rate is not only due to loose monetary stance.


The government towards this, has cut the open sale price of wheat, while ministers have pledged to import food items that are in short supply to boost local supplies and stem inflation.

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Dollar also showed strength and sparked fears of unwinding of dollar carry trade.

The Christmas week saw a ‘Santa Claus’ rally that took the market to 19 months’ closing high in a truncated trading week.

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Further, the latest data showed that corporate advance tax payments for the October-December 2009 quarter shot up sharply, suggesting a higher profit growth in corporate sector in the third quarter (October-December) of the current fiscal.

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The corporate advance tax payments for the quarter were up 44% to Rs.48300 crore against a 3.7% decline in April-June quarter and a 14.7% increase in July-September quarter.


The company-wise break-up of advance tax collection suggests a broad-based recovery with automobiles, cement, metals and consumer goods, doing well.

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Amidst all this, we had the Finance Minister‘s statement that containing inflation and cutting fiscal deficit are the major challenges for the government in the short-to-medium term.


Towards this the government can even alter the proposed draft for the direct tax code to sustain the high economic growth.

🙂


Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

Corn Futures Rose as Weaker Dollar Attract Buyers

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

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Corn Gains as Weaker Dollar, Last Week’s Slump Attract Buyers

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Corn Gains as Weaker Dollar, Last Week’s Slump Attract Buyers:

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Corn futures rose as a weaker dollar and the biggest weekly decline in 13 months attracted investors and importers.

Wheat and soybeans also rose.

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The dollar weakened as much as 0.2 percent against a basket of six major currencies, extending yesterday’s 0.3 percent loss and making U.S. supplies cheaper for importers.

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Nonghyup Feed Inc., South Korea’s biggest buyer of feed grains, bought 165,000 metric tons of corn for delivery between May and June, said two industry executives who took part in the bidding yesterday.

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Speculative net-long positions, the difference between investors’ orders to buy and sell corn, rose to an 18-month high during the four weeks ended Jan. 12, according to the U.S. Commodity Futures Trading Commission data.

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Short positions, or bets prices will fall, reached a three-year low in the week ended Dec. 29.

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In Other major Commodities Updates we can read that Prime Minister’s Economic Advisory Council is going to monitor impact of futures market trading on food price inflation.

Panel to monitor food futures:

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The Prime Minister’s Economic Advisory Council (PMEAC), headed by C Rangarajan, has asked the commodity futures market regulator to provide it with data showing the impact of futures market trading on food price inflation, said BC Khatua, chairman, Forward Markets Commission (FMC).

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FMC regulates commodity futures trading on four national and nineteen regional bourses.

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The government’s logic is that there would be more data to fall back on now since commodity bourses went live in FY05 than when the Abhijit Sen panel was constituted two and a half years after their inception to study the impact of futures trading on food price inflation.

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The blue ribbon panel led by Mr Sen submitted its report in 2008.

The report found no conclusive evidence of a link between futures trading and food price inflation.

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However, the FMC chairman and industry experts have in the past repeatedly drawn the attention of futures market skeptics to the fact that price of items that were banned from futures trading continued to rise even after the ban.

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Items which continue to remain outside the purview of futures trading include rice, tur, urad and sugar.

Items which were relisted are wheat, rubber, soya oil, potato and chana.

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Wholesale price index-based inflation increased by 7.31% in December 2009 from the corresponding month last year.

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Of this, food article inflation – food articles have a 15.4% weight in the wholesale price index–has risen by 19.17%.

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🙂

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