The National Commodity and Derivatives Exchange (NCDEX), the country?s largest farm-commodity bourse, will ramp up efforts to capture the non-agri futures segment more aggressively, says its managing director (in-charge) Samir Shah. The move comes in the wake of a perceived blow to the image of the Multi-Commodity Exchange (MCX), the country?s largest non-farm futures exchange, following a settlement scandal at another group company, the National Spot Exchange (NSEL).
?We will take more aggressive steps to secure a larger chunk of the non-farm futures segment… We aim to raise our turnover from the non-agri segment to 20-30% in the next 2-3 years,? NCDEX?s Shah told FE. Currently, non-farm futures make up for roughly 10-12% of the exchange?s total turnover.
Shah said NCDEX has plans to launch base metal contracts as well as new products within the gold segment, apart from the steel contract introduced recently.
Farm commodities accounted for 12.7% of the turnover value of all exchanges between April and November 15, according to data by the Forward Markets Commission. The data showed that while the turnover of farm futures has witnessed a dip of 19.5% in the first fortnight of November from a year before, that of bullion, metals and energy products?in which MCX dominates?has seen a drop of 72.4%, 70.9% and 63.6%, respectively.
However, it?s noteworthy that MCX?s volumes started dropping after the government imposed a transaction tax of 0.01%, mainly on non-farm commodity derivatives in July. With the imposition of the tax on the seller, costs would more than treble from the current R1.60 on a transaction value of R1,00,000, MCX executives had said after the imposition of the CTT.
On the NSEL crisis, Shah said the scandal has shaken the investor trust in the commodity market, both spot and futures. However, with the implementation of more stringent regulatory provisions after the NSEL crisis, the commodity market is going to be more invigorating as well as effective, he added.