The Hindu Business Line : MCX revamps commodity index

Mumbai, Aug 10 MCX has replaced wheat, urad and rubber with mentha oil, potato, cardamom and chana in the composition of its benchmark commodity index, Comdex.

With wheat and urad futures banned recently, rubber futures are traded on the exchange.

Among metals, aluminium, nickel and zinc find place alongside gold, silver and copper. Natural gas and crude represent the energy sector.

Group weights in Comdex have been modified from equal weights of sub-indices to 40 per cent each of metal and energy and 20 per cent of agriculture (agri index). “Each sector has been given due weightage to represent its significance in the physical and futures market,” a release from the exchange said.

On the metals side, gold will carry 16.6 per cent weightage, silver 10.4 per cent, copper seven per cent, and aluminium, nickel and zinc two per cent each.

In the energy sector, crude oil has been weighted at 31.8 per cent and natural gas at 8.2 per cent. On the agri front, refined soya oil has 3.1 per cent weightage, mentha oil 4.5 per cent, potato 3.3 per cent, chana 3.1 per cent and kapaskhali, guarseed and cardamom two per cent each.

With its component weightages being adjusted to reflect their physical market shares, Comdex could function as the augury of future price trends and help economic managers take appropriate corrective action, if not in advance, at least in time, MCX said.

The Index Maintenance Committee, comprising senior officials from the Indian Statistical Institute (ISI), Credit Analysis & Research Ltd and MCX, carried out the changes in the composition of the index. The index is calculated and displayed on a real-time basis at MCX trader workstations and at various other display centres.

In the long term, the changes will enable Comdex to retain its characteristics as an attractive tradable index, the release added.