Archive for January 28th, 2010

Now, Trading in Derivatives Contracts in 3 More Currency Pairs :)

Trading in Derivatives Contracts in 3 More Currency Pairs

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Spirits of indian investors and institutions dealing in foreign currencies were boosted by the latest news of regulators allowing Indian bourses to start trading in derivatives contracts in three more currency pairs.

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Rupee-Euro, Rupee-Japanese Yen (JPY) and Rupee-British Pound (GBP).

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Currently, only trading in futures contracts in Rupee-US Dollar is allowed on the bourses, which began on the NSE on August 29, 2008, followed by MCX-SX.

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Permission from the banking regulator Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) came within a month of the combined turnover of the two forex derivative boursesNSE’s foreign forex trading segment and MCX Stock Exchange (MCX-SX)— crossing the combined turnover of the cash market of NSE and BSE.

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Last fortnight, the forex derivatives markets recorded a turnover of nearly Rs 34,500 crore, compared to about Rs 23,200 crore on the two bourses’ cash segments.

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Although BSE offers forex derivatives trading, the segment is yet to take off.

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Following the global trend, where forex trading volumes dwarf volumes in both equities and commodities, the forex derivatives segment in India took just a year and a half since their launch to surpass the turnover in the cash segment of the bourses.

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However, spokespersons from both NSE and MCX-SX said that these bourses will start trading in these three new pairs very soon.

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🙂

Indian Private Equity Industry to Hit By US Banks Curbs : Experts

Indian Private Equity Industry to Hit By US Banks Curbs

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In case, US President Barack Obama‘s proposal to curb the role of commercial banks in hedge and PE funds is implemented, then fund-raising could indeed become a very tough task for Indian private equity players.

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But at the same time, the move could help Indian funds take part in more deals, market players insist.

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Obama has proposed to bar commercial banks from owning, advising and investing their own capital in PE and hedge funds.

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Though most investors in Indian PE funds are university funds, endowment funds, pension funds, insurance funds and institutional investors,  the industry expects the move to impact fund-raising in the long term and in big way, as banks will be barred from taking part in these funds.

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A large number of venture capital and PE funds of US-based commercial banks had reduced their exposure to India during the economic slowdown.

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Though few big ones like Goldman Sachs, Merrill Lynch etc; stayed back in the market.

Indian PE players hope to get more deals if these players vacate the market.

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Market experts do not see any significant impact in the coming few months, but cannot deny that a slowdown in USA market will surely impact the Indian private equity industry.

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They feel that any curbs on banks would make fund-raising a very difficult task since banks were the biggest contributors of funds.

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Industry players say the focus will shift from funds of banks to fund of funds, pension funds, and university and endowment funds.

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“It will be difficult to put a number as these transactions are structured in a complex manner.

But I believe a significant proportion of investments in India-based PE funds come from balance sheets of these banks.

These firms will be affected and will have to look for new sources of money,” said Jagannadham Thunuguntla, equity head at SMC Capitals.

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🙂

Spices Exports to Cross $1 billion: V.Kurien

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

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Spices Exports to Cross $1 billion

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Spices exports to cross $1 billion: Kurien

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Spices exports from India will cross the $1-billion mark in the current financial year, according to VJ Kurien, chairman of the Spices Board.

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Till December, the country had exported spices worth $830 million, despite the economic recession.

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Addressing a press conference here, Kurien said in the first half of the current year, the export sector was in troubled waters due to the economic downturn.

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But, exports of chilli, coriander, mint and value-added spices picked up later, he said.

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At present, the demand from these countries is largely met through European re-sellers and the board plans to attract buyers from these countries to sourcing markets in India.

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Kurien said the Spices Park at Puttady in Idukki district of Kerala would commence operation in the first week of March.

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In Other major Commodities Updates we can read about palm oil prices growing at a weaker pace and about the starting of Wheat e-auction for open mkt sale from February.

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Palm oil prices likely to recover at weaker pace:

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Palm oil prices, which have lost about 8% so far this year, are expected to grow at a weaker pace as rival soyoil eats into the vegetable oil market following a bumper US and South American soybean crop.

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Benchmark crude palm oil futures on the Bursa Malaysia Derivatives Exchange hit an all-time record of 4,486 ringgit in early March 2008 and then tumbled  to a low of 1,331 ringgit in October the same year at the height of the financial crisis.

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It is now trading 44% below record levels.

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Indonesia, the world’s top palm oil producer has projected output in 2010 to reach 23 million tonnes, up from 21 million tonnes last year.

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Malaysia, the world’s No. 2 palm oil producer, may see production increase by 3.4%, to 18.1 million tonnes this year, on the weaker impact of the El Nino weather condition, which usually brings drier weather.

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A free trade agreement between China and the 10-member Association of South East Asian Nations will see China’s import tariffs for palm oil cut to zero and 5% by January 2018 from eight and 9%.

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Wheat e-auction for open market sale to start from February:

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The government has decided to sell its excess wheat stocks through e-auction by the Food Corporation of India (FCI) from February.

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The e-auction intends to cut down prices of wheat offered under the open market sale scheme (OMSS) by reducing transaction cost.

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