Financial Daily from THE HINDU group of publications
Thursday, Oct 16, 2003
Financial Daily from THE HINDU group of publications Thursday, Oct 16, 2003 |
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Agri-Biz & Commodities
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Commodity Exchanges Futures trading in non-ferrous metals — MCX joins hands with Bombay Metals Exchange Our Bureau
Mumbai , Oct. 15 THE Multi-Commodity Exchange of India Ltd (MCX) has today signed a Memorandum of Understanding (MoU) with the Bombay Metals Exchange Ltd (BME) to launch futures trading in non-ferrous metals soon. The BME is a recognised body for non-ferrous metals trade and industry. "MCX's partnership with BME is an extension of the `National-Regional Exchange working Model' adopted by the MCX. Today we have signed a MoU. In the next stage, our working group of experts will finalise the working modalities of futures trading in non-ferrous metals soon," said Mr Jignesh Shah, Managing Director of MCX, at the conference held here today. "This partnership will enable close to 400 members of BME to trade in non-ferrous metals on MCX platform. India has been extremely dependent on overseas exchanges for hedging its risk in non-ferrous metals and we expect this alliance to now create an equally dependable and robust exchange on the line of the London Metals Exchange (LME)," Mr Shah said. Formerly, hedging was permitted across international exchanges, but the high costs, large contracts involved and dependency on international brokerage houses were prohibitive factors for traders in the country. "The alliance will facilitate BME members tremendously by providing easy access to a lowest cost, low size contract with a high margin of safety," Mr Surendra N. Parikh, a senior director of the BME said. Non-ferrous metals are amongst the most volatile commodities, which make the need for a futures market absolutely necessary for hedging the price risk, he said. In 1940, the BME was the only recognised exchange to carry futures trading in non-ferrous metals in the country. In 1956, the government banned the futures trading by introducing copper control order, he said. "The BME-MCX partnership would be enriched by this glorious past and will use it to drive in creating a global exchange within the Asia-Pacific region," Mr Ashok Bafna, President of BME said.
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