Posts Tagged ‘hedge’

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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INDEX – The Measuring Barometer

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.

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.

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.

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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.

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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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Performance 2009:

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The chart above depicts that with the bull-run in commodities,

this index has outperformed throughout in the year 2009,

as compared to other years, where they had shown a sideways movement.

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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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Performance 2009

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

Wheat Rises as Dollar Drop Boosts Outlook for U.S. Export Sales

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

 

Wheat Rises as Dollar Drop Boosts Outlook for U.S. Export Sales

Wheat Rises as Dollar Drop Boosts Outlook for U.S. Export Sales:


Wheat rose to a one-week high on speculation that prospects for U.S. exports gained because the dollar declined this month and as demand increased from investors seeking a hedge against inflation.

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Wheat prices also got a boost from concern that some U.S. growers were unable to plant winter crops because unusually heavy rainfall delayed the soybean harvest and hindered access to the fields.

 

U.S. shipments have lagged behind the year-earlier pace because of rising world stockpiles and because competing suppliers offered grain at lower prices.

 

Wheat also gained as speculative investors including index- and hedge-fund managers bought commodity futures that they deem to be undervalued, including wheat.

 

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In Other major Commodity Update, there is information about Soybean Prices rising on surging Chinese demand for U.S. Supplies.

 

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Soybean Prices Rise on Surging Chinese Demand for U.S. Supplies:


Soybean prices rose to a five-month high on surging demand for animal feed and cooking oil made from oilseeds shipped by the U.S., the world’s biggest producer and exporter.

 

From Sept. 1 to Nov. 19, U.S. export sales of soybeans rose 58 percent to 27.1 million metric tons (995.4 million bushels) from a year earlier, and China accounted for 62 percent of the total, government data show.

 

A drought this year in Brazil and Argentina, the largest shippers of feed made from the oilseed, boosted consumption of U.S. supplies.

 

U.S. sales of soybean meal from Oct. 1 to Nov. 19 surged 72 percent to 4.7 million tons from a year earlier, Department of Agriculture figures show.

 

Shipments of soybean oil have tripled.

 

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

Interest Rate Futures Trading Re-Launched in India after 6 years :)

IRF-trading-Nse

Trading in interest rate futures (IRF) kicked off in India after about six years on the National Stock Exchange (NSE)’s platform on Monday.

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The exchange traded financial instrument will give banks and corporates an avenue to hedge their interest rate risks.

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IRFs are contracts traded on the bourses with an agreement to buy or sell an underlying instrument with the date and the price pre-specified.

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The launch of IRF came a year after trading started in currency futures, which gives participants an avenue to hedge against currency risks.

With the launch of IRF, market participants now have the option to hedge foreign currency risks as well as interest rate risk.

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The launch of interest rate derivatives means a lot to the NSE, its constituency of brokers and all economic entities who face interest rate risk,experts quoted on the recent development.

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SBI, Union Bank of India, Central Bank of India, Axis Bank, ICICI Bank, and Standard Chartered Bank actively traded in the IRF market.

It’s the second birth for IRF as the product was launched in 2003 but did not succeed.

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All resident Indians and financial institutions, including

banks and FIIs, can trade in IRF in its new format. 🙂