September 30, 2020

Kotak-backed MCX plans extra index futures after bullion

By Swansy Afonso

Multi Commodity Change of India Ltd. plans to launch a slew of index-based futures to widen its choices to native traders, after beginning a bullion index.

The Kotak Mahindra Financial institution Ltd.-backed alternate, the nation’s largest venue for commodities, started a cash-settled bullion index futures on Monday and plans to begin an analogous product for base metals in a month adopted by power and farm commodities, Managing Director P.S. Reddy mentioned in an interview.

“The markets typically favor cash-settled contracts to delivery-based contracts,” as they don’t want to fret concerning the supply and high quality, he mentioned.


Rising investor urge for food for bullion has pushed up costs by virtually 30 per cent this 12 months, with file inflows into exchange-traded funds amid the coronavirus pandemic at the same time as bodily demand within the second-biggest client suffers.

The alternate, which began in 2003, already gives futures contracts in gold together with 10 grams, guinea, mini and petal contracts. Bullion accounted for 35 per cent of the corporate’s income within the monetary 12 months ended March 31, base metals contributed practically 19 per cent whereas crude oil was 40 per cent

MCX is at the moment within the means of allowing supply of gold primarily based on Indian requirements, and can also be exploring permitting secondary or recycled lead, Reddy mentioned. “This can additional deepen the connection between MCX and the bodily market,” he mentioned.

Common each day turnover on the bourse is about 300 billion rupees, near final 12 months’s ranges regardless of preliminary hiccups of lowered buying and selling hours because of the coronavirus outbreak, Reddy mentioned.