Posts Tagged ‘Indian Commodity Exchange’

Seasonal Index – “Time is Money” Final Part

Hello Friends here we come up with an extension of our previous blog, “Seasonal Index……“Time is Money” Part 2

In previous Blog, we had touched upon the aspect like analysis part of seasonal patterns in predicting the future prices of the commodity.

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Seasonal Index - “Time is Money” Final Part

In this Blog, we would read about that 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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Annual Average Method

The annual average method can be used to generate a seasonal pattern as well as predicting the future prices of the commodity.

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This seasonal price index is derived by calculating the annual average price, and then by expressing the price for each month during the year as a percent of the annual average.

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Here, the data which is used to derive the seasonal price patterns are the monthly prices taken between the year April’2004 & November’2009.

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The monthly indexes over the years are averaged to derive a price index that represents those years.

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An example of the technique is presented in Table 1.

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The seasonal price index table suggests that the index increases from the month of June, the time the buyers enter the market with full potential & reaches the highest till the end of the year.

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In The Year 2009

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The prices movement of this year almost followed the seasonal pattern, except few months.

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The supply constraints of lower output, as farmers opted for cotton, worked as a high base effect for the futures with a flat production figure of 8.5 lakh tonnes in 2008-09.

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The recovery in prices was noticed owing to the unforeseen failure of monsoons & comfortable stocks of 25-30 lakh bags from last year for which guar prices traded higher all through-out the year.

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This commodity created a history as it made a life time high, since the date of launch at national bourse, on reports that the output is estimated at 30-35 lakh quintals, down 62% due to factors like scanty rains in the major growing areas.

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Stronger Rupee along-with volatile Crude oil prices brought some corrections in export earnings from Guargum markets in Europe/US.

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However, upcoming demand for by-products such as churi & korma from international markets kept the millers interested in processing guar.

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In a nutshell, if investors want to spin their money safely & stabilize their net returns, using seasonal Index can prove to be a fair advantage.

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IDFC, KRIBHCO Buy 5% Stake Each in ICE :)

IDFC-KRIBHCO-buy-5%-stake

IDFC and Krishak Bharati Cooperative Limited (KRIBHCO)have purchased a stake of  5% each in Indian Commodity Exchange, which jointly promoted by Indiabulls Financial Services and MMTC.

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According to sources, the bourse will apply to Forwards Markets Commission, the regulator, after the completion of the formalities of the shareholding agreement.

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With the latest divestment, the current holding of Indiabulls stood at 40% while MMTC has 26%. The other shareholders include HDFC Bank, Yes Bank and Indian Potash.

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FMC guidelines stipulate a maximum shareholding of 40% in a commodity exchange by an anchor investor.
This has to be reduced to 26% within a period of two years starting with the fourth year from the date of exchange’s recognition.

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Earlier, FMC (Forward Markets Commission) rejected United Stock Exchange’s proposal to pick up 10% stake in Indian Commodity Exchange since it was yet to receive full recognition from capital markets regulator SEBI.

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The bourse is the latest entrant into the commodity futures space and will vie with the predominantly metals and energy bourse MCX and agri bourses NCDEX and NMCE.

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In August, FMC had directed the exchange, which had received recognition from the Ministry of Commerce over a year ago, to offer 10 per cent equity of USE to other competent partners and re-submit the application by September-end.

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