Financial Daily from THE HINDU group of publications
Tuesday, Apr 13, 2004
Agri-Biz & Commodities
Steel City Commodities opens MCX trading floor
Visakhapatnam , April 12
FUTURES trading in commodities is set to take off in India and already impressive strides have been made during the past few months, Mr Jignesh Shah, Managing Director of Multi-Commodity Exchange of India Ltd, Mumbai, has said.
Mr Shah was addressing a press meet here on Monday afternoon after inaugurating the online commodities trading floor in the Steel City Commodities Private Ltd.
He said the daily volumes in the multi-commodity exchange had already crossed Rs 200 crore in four months' time and he expressed the confidence that ``it would grow by leaps and bounds''. In three to four years' time, the volumes may touch Rs 50,000 crore, he said.
He said that for 40 years, forward trading had been banned and during recent times its importance had been realised. It would facilitate hedging and open up new opportunities with greater safety for merchants, wholesale dealers and speculators. The liquidity and spread would be good.
At present, there were 250 members in the exchange but many more were joining. The exchange was conducting training programmes all over the country to make the public realise the importance of forward trading, he said.
Referring to Andhra Pradesh, he said the Steel City group had membership in the National stock exchange and Mumbai stock exchange and it had 76 branches, most of them in Andhra Pradesh and a few outside the State. The group had a good reputation and immediately online trading facilities in commodities would be available in nine centres and in a month or so the facilities would be made available in 40-50 centres.
``In Guntur, in particular, we are introducing futures trading in red chilli and it would commence from next month,'' Mr Shah said.
Mr G. Rajagopala Reddy, Executive Director, Steel City Securities Ltd, said the exchange would remain open from 10 a.m. to 11 p.m. five days a week and to get membership one would have to pay Rs 3.5 lakhs. Besides, Rs 3.5 lakhs would have to paid as advance margin and Rs 1.5 lakh more for the V-sat terminal.
``Roughly, it would mean an initial investment of Rs 9-10 lakhs. We are confident commodities futures will catch up here and in other centres,'' he said.
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