Trading in bullion and energy, the worst performing segments in the futures market this fiscal, staged a rebound in the first half of November, helping the Multi-Commodity Exchange (MCX) grab an 86.7% market share during the period, its loftiest since July 2013.
Consequently, the turnover of various commodity exchanges improved in the November 1-15 period, as it dropped just 1.1% from a year before to R2,53,662 crore, compared with a 15% fall in the previous fortnight and a 50% fall this fiscal, according to the latest data by the commodity markets regulator.
The turnover of bullion trading across commodity exchanges rose 2.4% to R1,00,427.24 crore during the first fortnight of November, showed the Forward Markets Commission data. However, it was still down 60.4% year-on-year since April, mainly due to a steep fall earlier this fiscal.
Similarly, trading in energy futures across exchanges also rebounded and emerged as the best performer last fortnight with a 30.6% rise in turnover, although the segment has still witnessed a 51% fall since April. Interestingly, the trading value of farm commodities dropped the most (43%) in the last fortnight from a year before.
The latest rise in the trading of bullion and energy futures augur well for MCX, which primarily deals in metals and energy products. Earlier, analysts had blamed a 0.01% of transaction tax on non-farm commodity derivatives, imposed since last July, the spill-over effect of a settlement crisis at the National Spot Exchange and an investor shift towards equity for the plunge in the overall turnover across exchanges. The FMC data showed, the turnover of various exchanges during the April 1-November 15 period was still down at R37.05 lakh crore, compared with R74.16 lakh crore a year before.
The market share of MCX started falling at a fast pace after October last year, as the settlement crisis at group firm NSEL on top of the commodity transaction tax on non-farm futures hit trading. The exchanges’ market share had dropped from as high as 87.8% in July 2013, just before the NSEL crisis flared up in August, to 76.6% in December last year.