Stock Brokers Keen To Trade In Commodity Futures

Mumbai, July 23: | Updated: Jul 24 2003, 05:30am hrs
Even as the Securities and Exchange Board of India (Sebi) has allowed, in principal, stock brokers to participate in commodities futures trading in bullion, oilseeds, cotton etc members see this as a good opportunity to expand their volumes by becoming members of the newly constituted commodities exchange.

Members of The Stock Exchange, Mumbai (BSE) are quite keen to participate in this segment and see this a new avenue to generate additional income. Said Rajesh Jain, executive director, Pranav Securities, Commodities are widely traded and there is good volume as the concept of futures is being understood by the people. The futures market for commodities looks promising. It would be profitable for intermediaries to participate in the exchange as and when it comes up.

Brokers say that they would try and convince their existing clients to participate on the commodities exchange, which would drive up volumes for them. A BSE broker said, We will have to make some minimum investment initially and a client base will have to be built. Although it is premature to talk of returns, they would depend on the spot opportunity.

According to ST Gerela, director, business development, BSE: ICICI Bank has taken the BSE convention hall for the promotion and marketing of their exchange. As per section 81 A of the Securities Contract Regulations and rules, our members will not be allowed to trade on the commodities exchange, but if Sebi has given a nod it will provide an opportunity to our members to generate new business and earn additional revenues.

Said Hitesh Seth, technical analyst, Prabhudas Lilladher, We have yet to understand the modalities of how trading can be done on the commodities exchange. However, we need to organise ourselves first and then explore the opportunity. And if we are getting business, it will be an additional source of income for us and our volumes will move up so we would go in for membership.