Financial Daily from THE HINDU group of publications
Thursday, Nov 20, 2003
Financial Daily from THE HINDU group of publications Thursday, Nov 20, 2003 |
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Agri-Biz & Commodities
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Commodity Exchanges Multi Commodity Exchange goes live with 3 futures Our Bureau
Mr Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd, with Mr Jignesh Shah, Managing Director, Multi-Commodity Exchange, during the formal inauguration of exchange in Mumbai on Wednesday. — Shashi Ashiwal
Mumbai , Nov. 19 MCX (Multi Commodity Exchange of India Ltd) is uniquely placed to chase a $600-billion (Rs 30 lakh-crore) market opportunity, Mr Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd, said while formally inaugurating the live operations of the exchange on Wednesday. "Globally, the volume of commodities traded is three times the volume of equities traded. This points to an opportunity for commodity exchanges worth $600 billion. This is mind-boggling by any measure,'' he added. The inaugural function was attended by regulators, exchange members, leading exchange representatives, and industry associations. "Just four commodity categories can make this happen. Agricultural commodities have the potential to trade 10 times the underlying physicals of $30 billion. Bullion has the potential to trade 20 times the underlying physicals of $8 billion. Edible oils have the potential to trade 10 times the underlying physicals of $5.4 billion and metals have the potential to trade 10 times the underlying physicals of $2 billion," he said. There are several challenges for the exchange in attaining global leadership for India in commodity market exchanges. "They are liquidity, efficiency, quality assurance and infrastructure." On MCX, Mr Ambani said the exchange, which has footprints in 35 cities in 16 States, would also make the country an outsourcing destination for commodities in the world. "MCX has the making of a path-breaking initiative and a great institution. This combination is a daunting challenge. It demands clear conceptualisation, inspiring leadership, appropriate linkages and strong value proposition for users. These are the essential prerequisites for the success of this momentous project," he said. The exchange Managing Director, Mr Jignesh Shah, said the exchange targeted a trade turnover of Rs 25,000-50,000 crore in the ``near future". The formal inauguration was kicked off with Mr Ambani placing a buy order for gold futures contract. MCX started trading from November 10. The Exchange started trading in gold, silver and castor seed and the list is expected to grow bigger to encompass all commodities gradually. On the first day, maximum trading interest was witnessed in gold and that too in the first contract month (Gold-13 Feb 2004) in which 26 trades were done. Gold also witnessed an open interest of eight kg at end of the trading session. In audio-visual presentations, the company highlighted the record achievements and the incremental growth of the exchange in the last few months. Mr Shah said: "With this launch, MCX has proved its commitment to its members and all the stakeholders in the commodity ecosystem and we are confident of delivering value to our customers, offering benefits benchmarked against global standards." He added: "Our next milestone is clearly perfect liquidity and process efficiency of the highest order which we intend to achieve in the shortest possible timeframe like other milestones."
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