By market
Mumbai, January 16, 2014:NCDEX, the leading commodity exchange received a favourable response to its GOLDHEDGE contract launched today. The first day of trading upto 5 pm saw a volume of Rs. 100 Crore, with about 400 kg traded and an OI of around 100 kg.
GOLDHEDGE is an innovative gold contract that gives the most transparent and straightforward price benchmark of this precious metal to the consumer.
"Every ounce of gold traded in the country can now use our new reference price that is guaranteed free from distortion and ambiguity. GOLDHEDGE is a new way to discover the price of gold in India. It is innovative and it is the right benchmark for the Indian market where gold touches every household and every pocket." said Mr. Samir Shah, MD and CEO, NCDEX
Mr. D. K. Aggarwal, Chairman & Managing Director - SMC Comtrade Limited said "This is a very useful and relevant contract being launched by NCDEX particularly in view of the physical delivery constraints being faced by the physical players and the fact that the contract is intention matching contract, therefore the outstanding position would be cash settled. Thus, this would prove to be a very effective hedging and risk management tool for importers, traders, jewelers and exporters. Since the contract value would exclude custom duty & local taxes therefore, the total value of the contract is less as compared to the other existing contract of the same quantity"
Mr. Naveen Mathur, Associate Director - Commodities and Currencies, Angel Broking said "It is a very good contract and the kind of sync it has with the international market makes it exciting. Cost effectiveness is the other positive to the contract and this is a big step towards making the gold contract more feasible for different types of investors in India."
"This contract appeals to hedgers and I would see this getting good participation going forward." said Mr. Suresh Nair, Executive Director, ADMISI Commodities Pvt. Ltd.
"The contract mirrors the price discovery markets and will be distortion free and hence extremely beneficial for jewelers for hedging" said Vasu Acharya, Director Parker Bullion Pvt Ltd.
"This provides a wonderful opportunity for traders who are not looking for physical deliveries to invest in gold by tracking the international markets without worrying about local premium, taxes, etc. A simple contract where all they need to do is focus on the international market" said Kunal Shah, Head - Research, Nirmal Bang Commodities.
"This is the best hedging mechanism because in case of other contracts in the market there are a lot of distortions due to import restrictions which make them unattractive for hedgers." Bhushan Mendiratta, Director, Yug Commodities.
"First time we have a contract which has international parity, low cost, without any manipulations and hassles. We expect it to get a lot of volume," Suresh Arora, Director, Raghunandan Industries.
GOLDHEDGE is designed as an intention-matching contract, where delivery occurs only when both buyer and seller agree in advance on the quantity and location. With no compulsion to give/take delivery of gold bars, an investor can ignore the landed cost of the precious metal, local taxes, as well as the premium being charged by sellers due to short supply in the domestic market. Instead, he can focus on hedging the most accurate gauge of gold vis-à-vis the international market. And there is substantial saving in initial outgo resulting from this method of price discovery.
In short, by reflecting the true value of gold and offering the perfect hedge, the contract provides a unique opportunity for investors to add gold to their portfolio as a financial asset.
Domestic gold prices have a high correlation with international prices. However, after recent policy measures such as hike in customs duty and the RBI 80:20 scheme for jewellers, the correlation has reduced significantly. The new NCDEX contract is a derivatives instrument that will address the anomalies created by the physical markets in futures prices to provide a correct benchmark as well as allow wider participation in the gold market. India is the world's second largest market for gold.
As India's leading online exchange, NCDEX is where customers repose trust. It offers the widest range of benchmark products across agriculture, metals and precious metals. NCDEX brings buyers and sellers together through its electronic trading platform. With a widely held shareholding, it enjoys the distinction of being the only exchange in the country promoted by national-level institutions. The institutional promoters and shareholders of NCDEX are prominent players in their respective fields and bring with them institutional building experience, trust, nation-wide reach, technology and risk management skills.
For further details contact Shalaka Kagathra - 9820572798 Corporate Communications NCDEX Kalpesh Sheth - 9820305936 Corporate Communications NCDEX,,NCDEX
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