A PROJECT REPORT ON INVESTORS PERCEPTON OF FUTURE COMMODITY

Submitted By:
Manish B. Khitoliya(117690592092) Sameer M. Vishavadiya(117690592099)

Introduction Of KIFS
KHANDWALA KIFS SECURITIES LTD. is in the business of shares
and stocks broker ship, investment advisory, financial services and portfolio management in stock markets, debt markets and derivatives markets. We are also providing dematerialized accounts services.

We are corporate member of National Stock Exchange. We are equipped with sophisticated infrastructure in various cities in India. We have well qualified human resources doing research and analysis work. We have a dedicated team to provide support services to our customers.

Market Structure

Introduction Of Commodity Market.

What is Commodity?
Any product that can be used for commerce or an article of commerce which is traded on an authorized commodity exchange is known as commodity.

What is a commodity exchange?

A commodity exchange is an association or a company or any other body corporate organizing futures trading in commodities for which license has been granted by regulating authority.

What is Commodity Futures?

A Commodity futures is an agreement between two parties to buy or sell a specified and standardized quantity of a commodity at a certain time in future at a price agreed upon at the time of entering into the contract on the commodity futures exchange.

MARKET TIMMINGS

Monday to Friday Bullion, Metals, Energies & Etc: 10.00 a.m. to 11.30 p.m. (Summers) 10.00 a.m. to 11.55 p.m. (Winters) Agricultural commodities: 10.00 a.m. to 5.00 p.m. Saturday All Commodities 10.00 a.m. to 2.00 p.m. Holidays notified in advance

Commodities Available
Bullion Metals Energy Gold & Silver Copper, Lead, Zinc, Nickel, Aluminium, etc., Crude Oil & Natural Gas Mentha Oil, Kapas, Kapaskhalli, Refined Soya Oil, Soya Bean Pepper, Red Chilli, Jeera, Turmeric Chana & Rubber Guar Seed , Guar gum , Almond, Cardamom, Potato, Wheat Etc.

Oil & Oilseeds

Spices Pulses & Plantation

Others

Current Scenario Of Indian Commodity Market

Multi Commodity Exchange (MCX):MCX is currently largest commodity exchange in the country in terms of trade volumes, further it has even become the third largest in bullion and second largest in silver future trading in the world.

National Commodity & Derivatives Exchange (NCDEX):NCDEX is the second largest commodity exchange in the country after MCX. However the major volume contributors on NCDEX are agricultural commodities. About 60 percent trade on NCDEX comes from guar seed, chana and Urad (narrow commodities as specified by FMC).

National Multi Commodity Exchange (NMCE):NMCE is third national level futures exchange that has been largely trading in Agricultural Commodities. Trade on NMCE had considerable proportion of commodities with big market size as jute rubber etc

How Commodity market works?

BENEFITS

Additional Inv Opportunity Easy to Understand & Invest Less Investment Because of underlying Value & MSP,down fall is limited Price manipulation not possible because of global market Gives early alert on revival of Economy

Opportunities

Hedging Spot/Future Arbitrage Inter Exchange ( MCX/NCDEX) Spreads Inter Commodity ( Gold/Silver, Guar Seed/Guar Gum ) Intra Commodity Spreads (Calendar Spread ) Trading Intra Day Positional

Why Commodity Future is Better..?

Diversification The returns from commodities market are free from

the direct influence of the equity and debt market, which means that they are capable of being used as effective hedging instruments providing better diversification.

Less Manipulations Just as SEBI regulates the Stock

Exchanges, Commodity Exchanges are regulated by Forwards Market Commission (FMC) chances of manipulation is less in Commodity Market.

High Leverage The margins in the commodity futures market are

less than the F&O section of the equity market.

Two Way Market Opportunities Traders can benefit in a Bull

or Bear Market.

Performance Ranking (Financial Year 2011-12)

2010-11 2011-12 % Change Volume Volume 2011 (Million (million vs. Contracts) Contracts) 2012 140.26 513.42 434.86 420.66 210.03% -18.07%

Ranking

Commodity Futures Exchange

1 2

Shanghai futures Exchange (China) CME Group (includes CBOT & NYMEX)

3
4 5 6 7

Dalian Commodity Exchange (China )

319.16

416.00
227.11 207.23 161.17 106.46

30.59%
2.05% 4.31% 70.90% 0.57%

Zhen Zhou Commodity Exchange (China) 222.56 Intercontinental Exchange (includes U.S,U.K and Canadian Markets) 198.67 MCX London Metal Exchange 94.31 105.86

Symbol

Contract

LTP

Pricing Quotation

Lot Size (Qty)

1 Rs =

Lot Value (Price)

Span Margin

Margi n%

BULLION
GOLD GOLDM GOLDGUINI SILVER SILVERM SILVERMICRO 2 Monthly Monthly Monthly 2 Monthly 2 Monthly 2 Monthly 22500 22500 18300 56500 56500 56500 10 GRMS 10 GRMS 8 GRMS 1 KGS 1 KGS 1 KGS 1 KGS 100 GRMS 8 GRMS 30 KGS 5 KGS 1 KGS 100 10 1 30 5 1 2250000 225000 18300 1695000 282500 56500 90000 9000 732 127125 21188 4238 4.00% 4.00% 4.00% 7.50% 7.50% 7.50%

METALS
COPPER NICKEL LEAD LEADMINI ZINC ZINCMINI ALUMINIUM ALUMINI 2 Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly 430 1070 119 119 104 104 110 110 1 KGS 1 KGS 1 KGS 1 KGS 1 KGS 1 KGS 1 KGS 1 KGS 1 MT 250 KGS 5 MT 1 MT 5 MT 1 MT 5 MT 1 MT 1000 250 5000 1000 5000 1000 5000 1000 430000 267500 595000 119000 520000 104000 550000 110000 21500 18725 29750 5950 26000 5200 27500 5500 5.00% 7.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%

 MCX is a fully electronic multi commodity futures exchange with permanent recognition from Govt. of India. Average Daily Turnover (In Mth of July ,12)Rs. 62384 Crs (US$ 10.54 Bn) Highest Daily Turnover Rs. 100402.61 Crs 26h April,12

Highest Daily Turnover GOLDRs.23301Crs(US$5.04Bn)-27thNov0

Highest Daily Turnover SILVER-Rs. 45435.10Crs(US$6.71Bn)10thMarch,12 MCX is worlds Sixth largest global commodities Exchange in terms of contract traded Among the leading commodity exchanges globally (in terms of contracts traded)

No. 1 in Silver futures trading

No.2 in Gold, Copper and Natural Gas trading No. 3 in Crude Oil, Aluminium & Zinc trading

Playground

RESEARCH METHDOLOGY

Primary Objective of the Study

1. To study the perception of investors of commodity market. 2. To know awareness level of commodity and future market. 3. To know overall aspect of investment structure of investor.

Sub Objectives:
1. To study the growth of commodity markets 2. To find out the investment pattern of investors in commodity basis of income, age, occupation, etc

Research Design-Descriptive

Tools for Data Collection

The questionnaire is the tool used for data collection. And also use Colum and pie chart for the interpretation of data.

Analyses and Interpretation

The various tools for analysis used are graphs, charts, percentage growth, and secondary data.

Limitations and Constrains

Time duration of project and survey is very short so we cant do more study on this topic. We are take only 100 Respondents for this research and its only for limited to Ahmadabad city.

General information of Respondents

Column Chart Showing Sex Profile Of The Respondents
80%
Percentage

Pie Chart Showing Age Profile Of The Respondents

8% 16% 34% 20-30Years 30-40 Years 40-50 Years

60% 40% 20% 0% Male Female Sex Female

50 Year and above 42%

Male

Pie Chart Showing Occupational Profile Of The Respondents

9% 11% 5% 3% 26% Government Employee Private Sector Self-Employee Businessmen Commodity Futures Others 46%
36%

No. of Respondents income level

3%

29% Below Rs. 4 Lakh Rs. 4 10 Lakh Rs. 10 25 Lakh Above Rs. 25 Lakh

32%

Specific Research Data collection charts

Column Chart Showing The Percentage of Respondents who have Invested In Comodity Future
Column Chart Showing The Percentage of Respondents who have Invested Other Securities
80% 70% 60%

120% 100%

Percentage

80%

Percentage
Yes Particular Yes No No

60% 40% 20% 0%

50% 40% 30% 20% 10% 0% Yes Particular Yes No No

Column Chart Showing The Experience of Respondents in Their Previous Investment

60% 50% 40% 30% 20% 10% 0% Good Bad Particular Good Bad Reas onabl e Reas onabl e

Percentage

Canted
Column Chart Showing How long investors trade in commodity future
80% 70% 60%

Percentage

50% 40% 30% 20% 10% 0% Everyday Once a Week Onl y when there i s a good Pri ce

Everyday

Particular Once a Week Onl y when there i s a good Pri ce

Canted

Canted

Canted

Findings

Investors consider factor like global economy, availability of commodity. And Awareness of Future commodity market Investors doing technical and fundamental analysis from their brokers. age of 20-40 years are more active player 10-30 % of their income are invested in market Most of them believe that returns derived from commodity are good and reasonable. Media and friends are powerful communicating networks for expansion 50% of respondent takes short position in the market. It has been seen that about 67% investor are doing fundamental technical analyses. coffee, wheat and cotton are more dealing commodity and investor believe that commodity market have good opportunist market in future and most of investor invest when there is favorable price in market. Respondent also invest in other then commodity market to diversified their investment risk and most of investor have mix experience (good and bad) in commodity market . respondent view that coffee, silver and copper, cotton are most volatile commodity. The commodity futures markets are experiencing a good growth in the recent past. This can be emphasized by the fact that the trading volume of most commodities is increasing.

Conclusion

Now a days investor become more careful in investment with considering the factor like global economy, availability of commodity etc.
In the trading system people consider above factor for investment so we can conclude that investor are more moving towards the exchange traded market. The trading system also includes trading and intermediary participants, who ensure the correct price discovery. Thus, the trading system is one of the factors, which reduce the risk in commodity futures. In the commodity market various risk are involved but here with the help of the fundamental and technical analysis they are reducing their risk. It can be concluded that one can use commodity futures for the hedging purposes rather than for the speculative. This can be emphasized by the fact that there has been an increasing trend in the volume traded in most of the commodities. Thus, commodity futures are a growing market. From all the above conclusions of it can be concluded, commodity futures can be

Recomendatations

Since commodity futures are a new concept, more awareness must be created by marketing this investment instrument appropriately. If the minimum investment is reduced, this might induce more people to invest in commodity future. As commodity market are growing so one should trade in exchange traded market rather than the OTC market and one should take better position with the help of fundamental and technical analysis.

It is not a necessity that one must be very educated to invest in commodity futures. So, it is recommended that those who are not so well educated also can invest in commodity futures.
It is recommended that now a day investor should invest in Copper, silver and Agriculture commodity because The Fluctuation are more shown during the training and more volatile are there.

Bibliography
Trading Commodities and Financial Futures: A Step by Step guide to Mastering the Market, 3rd Edition by George Klein man Options, Futures and Other Derivatives by Johan C. Hull MCX Certified Commodity Professional Reference Material Websites (Used 5th June To 20th July,2012)

[Link] [Link] [Link] [Link] [Link] [Link] [Link]

Important Websites
[Link] [Link] Data, Charts, News and International prices: [Link] [Link] [Link] [Link] Bullion [Link] [Link] [Link] [Link] Metals: [Link] [Link] Energy: [Link]

Thank you