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NDEX lists 6 products for trade
Category: General Category Nepal Derivative Exchange Limited (NDEX) went into operation on Jan. 4 by listing six products for transaction on the market. It is the third derivate exchange company in the country. "Investors can invest in gold, silver, crude oil, copper, natural gas and heating oil on the NDEX at the moment," said managing director Santos Pradhan at a press meet on Wednesday. Gold in amounts of 1 kg, 500 grams and 100 grams can be traded on the NDEX. Likewise, silver can be traded in quantities of 30 kg and 5 kg, crude oil 250 bbl and 50 bbl, and copper 5000 kg and 1000 kg. "Investors have to pay Rs. 75,000 for trading 1 kg of gold on our market," Pradhan said. According to him, investors are more attracted to investing in gold and crude oil. The prices of the above goods will be based on the New York Mercantile Exchange. He said that the NDEX was studying the possibility of incorporating various agricultural products including cereal, tea, wheat, corn, jute, cardamom and yarsagumba in the list for trading and preparing the necessary physical infrastructure. There are 25 brokers involved in helping investors to trade on the NDEX, according to Pradhan. Kasthamandap Clearing House is operating as the clearing agent. Pradhan said the company's initial paid-up capital was Rs. 50 million. Source:eKantipur
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CHAPTER I INTRODUCTION 1.1 Background of the study This study isco nductedfo r thefulfillmento f therequirementsfo r summer project in the fifth semester of Bachelor of Business Administrationin Banking and insurance (BBABI) program. The summer project is entitled to 3 credits int he Bachelor of Business Administrationin Banking and insurance (BBA-BI), affiliated to Pokhara University. Thispro jectwo r k isco ncentratedo n thecommodity market in theco ntext of Nepal.Fo r the study, both thecommodity exchanges of Nepal, Commoditya ndMetalExchange Nepal Ltd (COMEN) and Mercantile Exchange Nepal (MEX) are thoroughly studied.
A commodities exchange is ane xchange where various commodities and derivatives products are traded. Most commodity markets across the world trade in agricultural products and other rawmaterials (like wheat, barley,sugar,maize, cotton, cocoa, coffee, milk products, pork bellies, oil, metals, etc.) andco ntractsbasedo n them. Theseco ntracts caninclude spot prices, forwards, futures and options on futures. Othersophisticated products may include interest rates,environmental instruments,swaps, or ocean freight contracts. Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges,in which they are bought and sold instandardized contracts. 1.2Statementof the problem Commodity market is the place where people can still earnt he profit evenift here is downfall in thepriceo f thecommodity. The major problem is thatpeople do not have enoughk no wledgea boutcommodity exchange. They do notkno w how theyfunction and risk associated with the exchanges. 2 Thereare two commodity exchanges established in thecountrynamelyCommoditya nd Metal Exchange Nepal Limited (COMEN) and Mercantile Exchange Limited (MEX). Thispr o ject has done somecomparison on thecommodity traded in theseo r ganisations. Thereare manyareaswhere thecommodity exchangesneed to work on.Somepr o blem in commodity exchange is that there ispr o per governance, lack of warehouse, etc. 1.3 Objectiveof the study Theprimaryo bjectiveo f this study is to fulfill therequiremento f thecourse.After completingt his program we have developed alot of workingskills in ourselves and gained practical knowledge. We are now able todeal with organizational tasks with confidence inefficient and effective manner.
The secondaryo bjectiveso f the studyare listedbelow: y To give insighta boutcommodity exchange. y To makecomparison between exchange systems inNepal. y To know marketco ndition of thecommodities. y To examinea nda nalyse the scopeo f thecommodity exchange inNepal y To find thebar rierso f thegr o wtho f thecommodity exchange. 1.4 Methodology 1) Study approach The study ispurelybasedo n the exploratory design finding thea nswers of research questions. Thepro blem ispro perly diagnosed through exploring as much information aspossible through differentareas.An exploratoryresearchwas conducted to get the information. Judgmental method used toid entify the sample elements for collection of data. 2) Sources oft he Information Primary sources of the information were used in the study. Data collected through theresearchwere the main sourceo f information.Besides that literature surveya nd 3 secondary data from thenewspapersa ndwebsiteswere used for further analysiso f thecommodity exchange. 2) Data collection procedure: Fort he collection ofdata I visited the site, news channel,magazines and newspapers. Also Iinterviewed with the professionals,e xperts of future market, and staffs oft he commodity exchanges to review the mechanism of commodity
4 CHAPTER II THE LITERATURE REVIEW 2. Data collection was difficult. So the study was conducted in a limited sample size. the data usedwhilepreparing thisreport isboth primary and secondary. y Thepast data regarding thepricechange in commodity isnotavailable due to the frequent change init s price.exchanges in Nepal. 1. y Data is limited tot he research and interview. Therefore. Details information about the working oft he future market also could not get due to the security and privacy reasons. y Theaccess to thecomplete information wasnotpossible due to the timea nd resource constraint. y Customers are not fully aware oft he working of commodity exchange since their business is supervised by the broker. Due tot his. These limitations are listed below: y In-depth and comprehensive study oft he workings int he field of commodity exchangecouldnotbe done due to differentpr actices in commodityExchange Company.5 Limitation of the study Therewerecertain limitationsfa ced in theresearchperiodwhich has in someo r theother way made impact int he conclusion oft h is report.1 Introduction of Commodity Exchange .
founded in 2006(2063B. The first exchanges that deal with the commodity exchange in Nepal was Commodity and Metal Exchange Nepal Limited (COMEN). Kathmandu.environmental instruments. forwards.maize.3. Commodity markets are markets where raw or primary products are exchanged. It serve the riskmanagement needs of customers around Nepal by offeringt he widest range of commodities as products available on any exchange . Further Exchanges are in pipeline. It monitors. futures and options on futures. cocoa. Othersophisticated products may include interest rates. barley. 2.3 ABRIEF PROFILE OF THE ORGANIZATIONS 2. It is one oft he first exchanges that deal with the commodity exchange in Nepal. Theseco ntracts caninclude spot prices. These raw commodities are traded on regulated commodities exchanges. pork bellies. coffee. oil. Most commodity markets across the world trade in agricultural products and other rawmaterials (like wheat. etc. or ocean freight contracts.sugar.traded via . and supervise all the company.swaps. Now these twoexchanges are providingt he future commodity business in Nepal. 5 It is situated at Lal Durbar. Thefirst exchange was only established int he country in 2006A.in which they are bought and sold instandardized contracts. regulate.D.licensed by it as trading or clearing broker fortransparency int he commodity exchange. metals. 2.S) is the largestand most diversecommodity exchange in Nepalfo r trading futuresand forward.) andco ntractsbasedo n them.A commodities exchange is ane xchange where various commodities and derivatives products are traded. Nepal. cotton. milk products.1 Introduction of Commodity and Metal Exchange Nepal Limited (COMEN) Commodity And Metal Exchange Nepal Limited (COMEN).2 History of Commodity Exchange in Nepal The history of commodity market isnot so old in thecase of Nepal.Later on Mercantile Exchange Nepal (MEX) was established for the same purpose.
It hasro bust delivery mechanism making it the most suitablefo r thep articipants in thephysicalcommodity markets.me tals & bullions among others. . research and training were adequately addressed instructuring theExchange.spices. In addition. optimize portfolio performance and adjust underlying exposureswith low transaction cost. privateandpublic sector marketing of agricultural commodities. warehousing. cooperatives. viz. 2. MEX is the first Exchange totake up the issue ofd ifferential treatment ofspeculative loss. It¶s future and forward contracts allowinvestors totransfer risk.vegetables.. MEX is theo nlyExchange in Nepal to have such investmentand technical supportfr om thecommodityrelevant institutions.it ¶ s clearing committee matches and settles all trades and guarantees thecreditworthinesso f every transaction that takesplace in the market. food grains.2 Introduction of Mercantile Exchange Nepal limited (MEX) Mercantile Exchange Nepal Limited (MEX) Various integral aspects of commodity economy. MEX commenced futures tradingin numbers of commodities on a national scale and the basket of commodities has grownsubstantially since thentoinclude cash crops. oil seeds. which shows a way tointroduce ware housereceipt systemwithin existing legala ndregulatoryfr amework.It¶s haswide range of commodities fortrading as financial instruments. It is alsot he first Exchange toenroll participation ofhigh net-worth corporate securities Members in commodity derivatives market.It is thefirst Exchange to complete the contractual groundwork forde materialization oft he warehouse receipts.COMENtrading floor.It hasalso establishedfair and transparentrulebasedpro ceduresand demonstrated totalcommitment towards eliminating anyco nflictso f interest. Today.3. It is the Exchange.
3.etc. Frozen Pork bellies. Milling Wheat.4 Commodities exchangesac ross the world Main commodity exchanges worldwide: S. Urea. Heating Oil. Wheat.6 2. London International Financial Futures and Options Exchange Cocoa. Lean Hogs. Gold. Non-fat Dry Milk. Propane. Ethanol. Name Contract Traded 1. Chicago Mercantile Exchange Butter. Oats. Chicago Board ofTrade Corn. Feeder cattle. Copper. Urea Ammonium Nitrate. Natural Gas. Soybean Oil. Gasoline. 5. Aluminum. Robusta Coffee. Soybean meal. Soybeans. Feed Wheat. Potato. Palladium. New York Mercantile Exchange Light Sweet Crude Oil.etc. RBOB Gasoline. . Rapeseed. Corn. Diammonium Phosphate. Silver. Electricity. Platinum. 2. Gold.no.etc.etc. Silver.liv e Cattle. Rough Rice. Milk. 4. White Sugar.
Dubai Gold and Commodities Exchange Gold.etc. 8. Gold. Cattle. Copper. Broad Wool. Fine Wool.etc. Silver. Zinc.T in. Silver. Lead. 9. Rubber.London Metal Exchange Aluminum. Palladium. Platinum. Cotton. Sydney Futures Exchange Greasy Wool. Steel. Aluminum. North American Special Aluminum Alloy (NASAAC). Nickel. Crude Oil.etc.etc. Fuel Oil. Linear Low Density Polyethylene. Bursa Malaysia Berhad Refined Bleached Deodorized . Freight Rates. Polypropylene. 6. 7. Aluminum Alloy. Tokyo CommodityExchange Gasoline. Kerosene.
Crude Palm Oil. Palm .7Palmolein.
Azuki beans (Red). Central Japan Commodity Exchange Gasoline.etc. Corn. Plywood & Long Grained Rice 13. Kansai Commodity Exchange Soybean. Soybean. Brazilian Mercantile and Futures Exchange . Rubber Index 14. 15. etc. Coffee. Shrimp (frozen). Natural Rubber. Dalian Commodity Exchange Corn. 12. Kerosene. Nickel. Raw Sugar. (Technically Specified Rubber)TSR20. Ferrous Scrap. Raw Silk. Eggs. Gas Oil.etc. Aluminum. Aluminum. Shanghai Futures Exchange Copper. Soybean Meal.Kernel Oil. 11.etc 10. Osaka Mercantile Exchange (Ribbed Smoked Sheets) RSS3. Soy Oil.
WTI and all the futures contracts of its subsidiary -T he International Petroleum Exchange (IPE) 8 2. Raw Silk. Corn. Tokyo GrainExchange Corn. 2. Feeder cattle. The TB can also act as a Broker. Cotton. Gasoline .he candeal on behalf oft he clients. Soybeans.Clearing Broker .etc. Heating Oil. Trading -cum. TB will settle the transactions throughClearing Brokers(Trading & Clearing Brokers or Institutional Clearing Brokers).1 Types of Broker of COMEN 1. Coffee. Natural Gas. Sugar. 17.5. Soybean. Gas Oil. 16. Live Cattle. As a Broker.Anhydrous Fuel Alcohol. Crystal Sugar. Electricity. Vegetables. Red Beans. Coal.5 Types of Broker/Members 2. Gold. Soybean Meal. Robusta-Conillon Coffee.etc. All the trades have to be executed only through the Trading facilities provided by theExchange. Arabica Coffee. Introductory (Trading)B roker Trading Broker (TB) isa BusinessAssociate of COMEN who has theright to execute transactions in the trading systemo f the exchangea nd theright to haveco ntracts in its own name. Emissions. Intercontinental Exchange Brent Crude Oil.
3.CBsarepro fessionalclearers in the market providing clearingservices to the institutional clients.Sub Broker Sub-Brokeris a registered Broker oft he COMEN whohas the right toexecute transaction in the trading systemo f the exchangeo nly througha TB/TCB. settlemento bligations etc) of TBs on whosebehalf they haveagreed to clear the trades. TCBs will be responsible to COMEN for all the obligations (margins. 4. TCB also aright to clear the transactions in contracts executed in COMEN either on its own behalf or on behalf of otherTBs. A CBdoes not have the right tohave contracts executed in the trading system of COMEN.Sub Broker enters transactions in COMEN throughBr o kers.Trading cumClearing Broker (TCB) is a Broker of COMEN who has theright to execute transactions in the trading systemo f the exchange likea TB.Sub Brokers introduce theclients to the Brokers. Clearing Broker CBis a Broker of COMEN whohas the right to cleartransactions done in COMENt hat are executed in the tradings yst e m of the exchange by TBs and their clients who are Registered Non Brokers with COMEN. Sub-Brokers do not have the right tohave contracts int he ir own name. Sub- .
who in turn settle throughClearing Brokers(TCBs or CBs).9 Brokers will settle the transactions of clients introduced by them.Sub-Brokerswill enter into an .t hrough Brokers.
Lalitpur-14.5.com 03 Investment Support Pvt. Ltd. Fax:977-01-4414522 Cell: +977-9851074777 Email: email@example.com with the TB who would provide trading limits tot he m. 2. Ltd. Broker Address Contact 02 Superstar Investment Nepal Pvt.2 List of Brokersof COMEN Some oft he brokers of COMEN are as follows: Code No.com . Mahalaxmithan Cell: 977-9841220231 Contact Person: Shakespeare Pandey Email:superstarnepal@gmail. Kathmandu. Sub-Brokers are also required to obtain registration from COMEN. Lazimpat Ph:014414285.
Galaxy Marg.com 11 Bright Future Investment Co. Ltd.04 Kamal Vinayak Securities & Investment Pvt. Dhapasi Kathmandu Cell:977-9841429103 Contact Person: Anka Bhadur Karki Email: firstname.lastname@example.org bhuju Email:loha_dams@hotmail. Ltd.com. Pvt. New Baneshwor. . Ltd. Gyaneshwor.np 12 Morning Star Investment Services Pvt. Kathmandu Cell: 977-9841553258/98413666454 Contact Person: Damodar Lohani.
com.np 15 Eco-Max Commodities Pvt.34. Kathmandu Cell: 9851110060 Contact Person: Josheph Adhikari Email:info@morningstar. Gothatar06.Kathmandu Cell:977-9841388801 Ph: 977-1-6632291 Contact Person: Devendra Prasad Pradhan . Ltd.
Kathmandu.co m 20 Agro-Metal Investment Pvt. Lalitpur Cell:977-9851008056 Ph: 977-1-5534883 Contact Person: Robin Shakya Email: please35@hotmail. Ltd.com 19 Golden Earth Securities & Investment Pvt. Ltd. Kathmandu Cell:977-9851110176 Contact Person: Bishnu Hari Aryal Email: bishow2000_27@hotmail. . Shree Bahal. Hattisar. Ltd.10 17 Columbus Investme nt Pvt. New Baneshwor.
16. Ltd.co m 28 Vaibhav Laxmi Investment Pvt. Kamaladi. Baliphal. Ltd.maharjan@hotmail. Ltd. New Baneshwor.com 26 Nepal Futures Market Investment Pvt.Kath mandu Cell:9841281369 . Lalitpur Ph: 01-5550221 Contact Person: Narsh Maharjan Eamil: kedar. Kathmandu Cell: 9802031309 Contact Person: Umang Bagaria Eamil:u mang@yetishop.Ph: 977-1-4464876 Cell: 977-9841239660 Contact Person: Bandhu Karki 21 Nimbus International Company Pvt.
Ltd. Sinamangal9. Tangal.com 92 Paradise Securities Pvt.np 50 Pancha Buddha Futures Investment Pvt. Ltd. Ltd.Contact Person: Prakash Ghimere 29 Mass Capitals Pvt. Lalitpur Cell: 9841801606 Contact Person: Sagun Bajracharya Eamil: jl_bajra@yahoo. Kathmandu Tell No: 01-4276129 Contact Person: Shreya Rajbhandari / Bhupesh Rajbhandari Email:saroj@mass.Kathmandu Cell: 9841337511/ 9841606424 Contact Person: Rabindra Acharya .com. Ravi Bhavawan.
11 Email:email@example.com. 014770917/4770637 Email: info@nepalcomexmarket. Anamnagar.com 2.3 Typesof member of MEX Non-Clearing Member Non-Clearing Member (NCM)is ame mber of MEX whohas the right toexecute transactions in the trading systemo f the exchangeand theright to haveco ntracts in its .com 99 Emerging South Asia Pvt.com Website: http://nepalcomexmarket. Kumari Galli (Near APCA HOUSE) Contact Person: Santosh Pradhan Cell No. Ltd.: 9851109487 Phone No.
.NCM isrequired to maintain a separateaccount for client transactionsa nd isrequired to maintain the margin deposit and money belongingto clients insegregated accounts. Breach of rules.own name.s hall not be allowed todo furthertradingunless the limits are reset on receipt of additional deposits. Regulation and bye-laws by a NCM. As a Member. The obligations oft he NCMs are monitored by the associated CM. Thefollowing category of NCM shallbeavailable in membership: y Professional Non-Clearing Member y Individual Non-Clearing Member y Institutional Non-Clearing Member. All the trades have to be executed only through the Trading facilities provided by the Exchange.s/he cand eal on behalf oft he clients. NCM will settle the transactions throughClearing Members.
They will be allowed to set the limits fortrading by NCMs. CMs will be responsible to MEX for all the obligations (margins.4 Listof the membersof MEX Member . They will alsotake the required Caution Deposit from the NCMs. CMs will enterinto Clearing Agreements with their constituent Non-Clearing Members. CMs are required tomaintains egregated accounts oft he all the monies belongingto NCMs on behalf of whom they are clearing the trades. CM also a right to clear the transactions in contracts executed in MEXeit her onit s own behalf or on behalf of other NCMs.12 Clearing Member Clearing Member (CM)is a Member of MEX whohas the right toexecute transactions in the trading systemo f the exchange like a NCM. 2.5. Ift he clearingli m it s of CMs are breached.set t le ment obligations etc) of NCMs on whose behalf they have agreed to clear the trades. all the Non-Clearing Members attached tot he m will be stopped from furthertradinguntil the limits are reset on receipt of additional deposits.
Nepal www. Tripureswor. New Road. Kathmandu.axisbroking. Members Address Website Clearing Members CM10 Axis Broking Solution Pvt Limited Pureneshwor Marg. Nepal www. . com CM20 Himalayan Commodity Brokers Pvt. Kathmandu. Ltd Bira Complex-4th Floor.hcbnepal.com Non Clearing Members N001 Standard Commodities Pvt. Ltd Kamalpokhari-31.No.
Nepal www. Nepal www.jambhalainv est.Kathmandu.standardcom modities. Lalitpur. ltd Jawalakhel-20.com N002 Jambhala Investment Pvt.com .
Nepal www. Nepal N005 Quest Commodities And Investment Pvt. Ltd HakaTole-11. Lalitpur.com N006 Mero Co-operative Ltd Kupondole-10. Ltd Kathmandu Metro31. . Kathmandu. Putalisadak. Nepal N004 Kasthamandap Commodity Broker And Investment Company Pvt Ltd Nagpokhari.13 N003 Option Derivative Commodities Markets Pvt.questcommo dities.
Nepal N012 FewaTrade Exchange Solutions Pvt.Lalitpur. Kathmandu .com N009 Sujit And Brothers Kupondole.Nepal www.Kathmandu. Ltd Indrachowk . Nepal N020 Morning Star .expedientsec . Pokhara-8. Lalitpur. com. Nepal www. New Baneshwor . Nepal N008 Expedient Securit ies Pvt.np N015 Smart Investment Company Janak Marga-34 .fewatradeex. Ltd Srijhana Chowk.
Kathmandu-33. Bhairahwa. Ltd Maitidevi. Nepal N026 Universal Dhapasi.morningstar. Kathmandu.np N022 Money Plus & Securities Pvt. N023 Dream Merchant & Securities Pvt Ltd Udhyogpuri. Nepal www. Ltd New Baneshwor-34. com.Investment Services Pvt. Rupandhi. .
Kathmandu-10. Nepal N028 Futures Fortune Pvt Ltd Kamaladi. Nepal N027 Speculators & Hedgers Investment Pvt Ltd Buddhanagar.14 Commodities Pvt Ltd Kathmandu-9. Ganeshthan. .
6 Objectivesof Commodity Exchanges ‡ To establishfair price discovery mechanism. ‡ To help EXIM. ‡ To standfo r market integrityandprice transparency. Ramshapath N030 Initiative Trade Pvt. ‡ Development and implementation ofhe dging needs 2.Kathmandu. ‡ To establishglobal standard in exchange trading.futuresfortun e.3 2. Nepal www.com.7 Future Plansof Commodity Exchanges . Ltd Putalisadak . Processor andGr o werbypr oviding risk mitigation system. ‡ To establish efficientClearing andguaranteed settlement system.np N029 Simrik Investments Pvt Ltd Baggikhana.
‡ Market Expansion ‡ International Tie up ‡ Product Expansion ‡ Effective price collection ‡ Warehouse Development 15 CHAPTER III DATA PRESENTATION AND ANALYSIS .
storage and perishable nature of agro-products. copper and Zinc.1 Products in Exchange Thecommoditypr oducts includefuturesco ntractsbased on agro-productsandother agro related products along with metal products like gold. Due tot he problem of warehousing.silv er.3. Thefollowing is the listo f thepr oductscategorizedby itsnature. COMENhas currently stoptradingin agro products whereas MEX is tradingt he product but they are not providingt he physical delivery oft he goods. Table1 : listo f thep roductscategorizedby itsnatureby COMEN andME X Product Nature MEX COMEN Wheat (WHT) Agro based Soybean (SOY) Agro based Crude Soy Oil (SBO) Agro based Cotton (COT) Agro based .
Coffee (COF) Agro based Crude Oil (CRU) Non-Agro based Natural Gas(NAG) Non-Agro based Heating Oil(HEA) Non-Agro based Gold(GOL) Non-Agro based Silver(SIL) Non-Agro based .
Copper (COP) Non-Agro based Zinc Non-Agro based -exchange dealing with respected commodity -exchange not dealing with respected commodity .
16 3.2 Contract sizeas per exchanges Mex has determined its commodity contract as follows: Table 2: Commodityco ntract size of MEX Commodity ContractSize Margin(NPR) Price Quoted at Mex Wheat(WHT) .
000 NPR/Kg Natural Gas (NAG) 2500 Mmbtu 60.20.000kg 35000 NPR/Kg Soyabean(SOY) 20.000kg 35000 NPR/Kg Crude Soy Oil(SBO) 22000 Liters 70000 NPR/ltr Cotton(COT) 10000 kg 35000 NPR/Kg Coffee(COF) 5000kg 45000 NPR/Kg Crude Oil(CRU) 250 US Barrels 60.000 .
NPR/Kg Heating Oil (HEA) 10.000 Liters 80.000 NPR/Kg COMENhave determined its commodity contract as follows: Table 3: Commodityco ntract size of COMEN Commodity ContractSize Margin(NPR) Price Quoted Gold (GOL) 100. 1 Kg.000 NPR/Kg Copper (COP) 1000 Kg 35.000 NPR/Kg Gold (GOL) 1 Kg 60. 3 kg . 500gms.000 NPR/Kg Silver (SIL) 30 Kg 60.
weeks¶ highest price and the lowest price and the closing price oft he commodity. The prices are thus.60.000 NPR/Kg Silver (SIL) 30 Kg 60.3 Weekly priceupdate of commodity in Future Market Thepriceo f thecommodity is taken on theweeklybasis starting from theAp ril 6 for the 7 weeks.000 NPR/Kg Copper (COP) 1000 Kg 35. Int hese weeks of reviewingt he price oft he commodity following outcomes has been concluded. .000 NPR/Kg 3.taken as opening price at the beginning oft he week.
1: Changes in theGoldPriceatME X Open High Low Close .Gold Theprice levelo f differentperiod is quotedbelow. At MEX Exchange Table1.17 1.
43 20875.91 22111.91 May 25-31 23121.65 22540.84 22805.82 21251.1 It is shownint he figure below: Figure 1.95 22470.05 22073.42 May 11-17 22087.81 22176.7 21198.38 21352.24 20894.6 May 4-10 21352.36 Apr 13-19 21200.01 22027. 2009t he price is inincreasingtrend int he form of white candle.6 22338.77 21745.1: Changes int he Gold Price at MEX Int he figure.47 22080.29 21369.4 Apr 27.83 23642. Laterin the month of May.45 21603.27 20873. black candle shows that the price oft he gold is decreasingint he first two weeks where the closing price is less thant he opening price.54 23675.May 3 22029.Apr 6-12 21557.42 20950. .75 23111.13 Apr 20-26 20979.04 23258.84 May 18-24 22519.73 21918.
20000 20500 21000 21500 22000 22500 23000 23500 24000 Apr 612 Apr 1319 Apr 2026 Apr 27May 3 May 410 May 1117 May 1824 May 2531 Open .
High Low Close .
18 At COMEN Exchange Table1.1: Changes in theGoldPriceatCOME N Open High Low Close .
00 22814 22380 Apr 20-26 22446 23572 22420 22386 Apr 27-may 3 23598 23710 23135 23229 May 4-10 22911 23469 22901 23069 May 11-17 .Apr 6-12 24378 24593 24162 24447 Apr 13-19 22848 23164.
21000 21500 22000 22500 23000 23500 24000 . Latert here is fluctuationint he gold price havingups and downs represented by the black and white candles.23329 23932 23366 23785 May 18-24 23349 23349 22624 23272 May 25-31 23316 23894 23261 23867 It is shownint he figure below: 1. Figure 1. 2009 at Rs24593 per 10 grams.t he price is at highest at April.1: Changes int he Gold Price at COMEN Int he figure.
24500 25000 Apr 6-12 Apr 1319 Apr 2026 Apr 27may3 May 410 May 1117 May 1824 May 2531 Open High Low Close .
Table 2: Changes in theCrudeOilP rice Open High Low Close Apr 6-12 . Crude Oil Theprice levelo f differentperiod is quotedbelow.19 2.
75 3942.5 3504.75 4020 3552.75 4390.May 3 3867.25 May 4-10 3959.25 4239.75 3600.5 3922.25 4401.75 3867 Apr 27.76 Apr 13-19 4098 4098 3768 3929 Apr 20-26 3922.75 .25 4205.75 4023.5 May 11-17 4392 4505.75 3910.3933.75 3959.
5 4981.25 4787.May 18-24 4284.25 May 25-31 4616.75 4668.5 It is shownint he figure below: Figure 2: Changes int he Crude Oil Price Thefigure shows that theprice of crudeoil isnot stable too.5 at the highest in the two months.5 4465. Its price closes at lowert hanit s opening. Crude oil price seems to be strugglingto be stable. But int he May. 2009it s price is in the increasingtrend upto Rs 4981.I n thewhole month of April. 3000 3500 4000 4500 5000 5500 Apr 612 Apr 1319 .75 4257 4616.
Apr 2026 Apr 27May 3 May 410 May 1117 May 1824 May 2531 Open High Low Close .
Silver Theprice levelo f differentperiod is quotedbelow.20 3. Table 3: Changes in thePrice of Silver Open High Low Close .
64 284.08 May 11-17 .88 311.04 318.Apr 6-12 307.8 305.52 309.32 311.96 337.04 300.76 Apr 13-19 296.16 297.May 3 311.52 284.36 Apr 20-26 286.52 289.8 296.04 285.24 290.84 Apr 27.36 May 4-10 297.96 341.
after the series ofdownfall in the silver price in April.48 May 25-31 354.12 and last week of May and lowest at the Rs 284. It seems to be recoverlaterin the month of May having the highest price of Rs 378.08343.12 It is shownint he figure below: Figure 3: Changes int he Price of Silver Int he figure.225 308. 250 270 290 310 330 350 370 390 Apr 6-12 Apr 13- .12 378.48 378.32 358.25 May 18-24 337.04int hird week of April.337.2 328.72 345.8 354. 125 306.
19 Apr 2026 Apr 27May 3 May 410 May 1117 May 1824 May 2531 Open High Low Close .
Soyabin Theprice levelo f differentperiod is quotedbelow. Table 4: Changes in thePrice of Soyabin Open High Low Close .21 4.
45 30.44 28.12 31.97 Apr 20-26 29.27 29.77 Apr 13-19 27.Apr 6-12 27.11 May 4-10 30.57 27.17 29.05 27.91 28.7 29.88 30.May 3 28.91 30.51 28.27 27.32 27.15 26.52 Apr 27.55 May 11-17 .
09 May 25-31 32.77 30. 25 27 29 31 33 .02 32.09 31.77 30. Thereareo nly two weeks where its opening price is lowert hant he opening price shown by black candle while in rest oft he weeks the price has beenincreasing reachinghighest of Rs.30.65 It is shownint he figure below: Figure 4: Changes int he Price of Soyabin Thefigure shows that theprice of Soyabin is in increasing trend.33.11 33.01 32.72 32.09 at end of May.69 28.09 May 18-24 31.69 32.
35 Apr 6-12 Apr 13-19 Apr 20-26 May 4-10 May 4-10 May 1117 May 1824 May 2531 Open High Low Close .
Soyabin Oil Theprice levelo f differentperiod is quotedbelow. Table 5: Changes in thePrice of Soyabin Open High Low .22 5.
32 65.76 58.56 66.3 May 4-10 62.66 62.Close Apr 6-12 58.42 May 11-17 64.54 57.24 60.18 58.62 62.42 59.1 60.46 .28 56.92 58.58 62.52 Apr 13-19 58.32 65.58 61.May 3 60.8 61.78 Apr 20-26 60.4 Apr 27.
74 64.I n thewhole month of April.9 64.66. it decreases to thea boutaverageprice of Rs.62.78 May 18-24 62.46. Crude oil price seems to be increasing till second week of May. Laterin the month its price faces some obstruction.66 62.5 It is shownint he figure below: Figure 5: Changes int he Price of Soyabin Thefigure shows that theprice of crudeoil isnot stable.5.62 62.52 60.4 61. After the highest price change upto Rs. 55 57 59 61 63 65 67 69 Apr 6-12 Apr 13-19 Apr 20-26 Apr 27May 3 .84 May 25-31 62.78 64.64.
May 4-10 May 11-17May 18-24 Open High Low Close .
Table 6: Changes in thePrice of NaturalGas Open High Low . Natural Gas Theprice levelo f differentperiod is quotedbelow.23 6.
575 May 11-17 .825 288.85 260.Close Apr 6-12 285.May 3 253.9 Apr 20-26 279.825 270.325 244.15 Apr 13-19 270.25 Apr 27.65 326.65 269.575 265.65 May 4-10 265.25 325.95 279.875 262.275 245.3 283.175 245.9 280.6 264.
225 308. 200 220 240 260 280 300 320 .85 260.25 317.575 it covers and reaches to its highest price of Rs.55 It is shownint he figure below: Figure 6: Changes int he Price of Natural Gas Thefigure shows thatcrudeoilpricefa ces upsa nd downs.244.Itprice increasesand decreases in theco nsequentweeks.125 306.125 a weeklater.315.After reaching the months lowestatRs.8 262.8 343.75 May 25-31 271.85 270.5 290. 343.95 307.25 May 18-24 308.
340 360 Apr 6-12 Apr 1319 Apr 2026 Apr 27May 3 May 410 May 1117 May 1824 May 2531 Open High Low Close .
Heating Oil Theprice levelo f differentperiod is quotedbelow.24 7. Table 7: Changes in thePrice of Heating Oil Open High Low .
Close Apr 6-12 28.01 .25 28.28 Apr 13-19 28.28 May 4-10 27.96 28.25 25.49 27.15 26.79 26.7 25.May 3 27.72 27.28 28.46 27.06 Apr 27.29 30.25 Apr 20-26 28.64 27.59 29.65 28.29 32.
01 28. 32.32 29.34 May 25-31 30. It does well in the month of May by reaching the two months highest of Rs.49in next week. itgr aduallyrecoversa nd hasgreater flight upto Rs.25. 25 26 27 28 29 .45 28.09 May 18-24 28.33.01 30.73 220.127.116.11 28.02 30.May 11-17 30.33 It is shownint he figure below: Figure 7: Changes int he Price of Heating Oil The heating Oilfacea severeblow in the month of Aprilfollowedbyco ntinuousfall in itsprice.09 30.86 33.Butafter reaching its lowestatRs.
30 31 32 33 34 Apr 6-12 Apr 1319 Apr 2026 Apr 27May 3 May 410 May 1117 May 1824 May 2531 Open High Low Close .
Coffee Theprice levelo f differentperiod is quotedbelow.25 8. Table 8: Changes in thePrice of Coffee Open High Low .
Close Apr 6-12 328.24 343.84 319.6 343.92 Apr 13-19 197.04 198.88 183.6 184.64 Apr 20-26 187.84 197.6 186.4 197.12 Apr 27- May 3 197.12 199.68 191.2 198.56 May 4-10 198.8 211.36 197.04 210.72 May 11-17 210.8 216.16 206.4 211.28 May 18-24 221.28 227.2 210.08 222.24 May 25-31 221.76 229.6 218.88 226
It is shownint he figure below: Figure 8: Changes int he Price of Coffee Thefigure shows that theprice of coffee shows theabno rmalpricechange.Itsprice in secondweek of April is irrespectively higher than itsprice inother times.After thegreat depression in itsprice in thirdweek itsprice isgr adually increasing.Its highestprice is Rs.343.84 and its lowest is Rs. 183.6. 180 200 220 240 260 280 300 320 340 360 Apr 6-12 Apr 1319 Apr 2026 Apr 27May 3 May 410 May 1117
May 1824 May 2531 Open High Low Close
Cotton Theprice levelo f differentperiod is quotedbelow.26 9. Table 9: Changes in thePrice of Cotton Open High Low .
May 3 87.78 82.26 79.96 .56 82.46 94.66 Apr 20-26 93.9 77.6 Apr 13-19 77.64 84.8 May 4-10 94.9 86.98 87.84 82.34 99.88 79.54 76.88 Apr 27.16 93.86 94.52 98.Close Apr 6-12 78.
5 May 25-31 94.On theweeklyoverview.04 101.96 and lowest is76. 70 75 80 85 90 95 100 .72 91.101.8 93.96 92.May 11-17 99. there is three weeks oflower closing price.54 94.98 May 18-24 92.88.98 95.1 It is shownint he figure below: Figure 9: Changes int he Price of Cotton Thefigure shows that theoverallpriceo f thecotton is increasing anda fter reaching the highest in the secondweek of May it declines.66 94.76 92. It highest price is Rs.66 89.
105 Apr 6-12 Apr 1319 Apr 2026 Apr 27May 3 May 410 May 1117 May 1824 May 2531 Open High Low Close .
Table 10: Changes in thePrice of Wheat Open High Low .27 10. Wheat Theprice levelo f differentperiod is quotedbelow.
78 14.06 16.7 11.63 14.71 13.76 16.81 14.27 .38 14.May 3 14.41 14.39 14.39 Apr 13-19 14.5 15.16 14.Close Apr 6-12 15.45 Apr 20-26 14.96 15.39 Apr 27.71 May 4-10 15.28 15.24 15.
itgr adually increases. it is in increasing in slow andgr adual trend.May 11-17 16.54 It is shownint he figure below: Figure 10: Changes int he Price of Wheat Thefigure shows that theprice of wheat is stableascompared to other commodities.86 15. 10 12 14 16 18 20 Apr 6-12 Apr 13- .Besides itprice decreases in Aprilbut in the month of May.59 15.I n theoverallprice structure.6 17.86 May 18-24 15.82 17.89 May 25-31 16.03 15.86 17.52 16.81 16.29 16.
19 Apr 2026 Apr 27May 3 May 4-10 May 1117 May 1824 May 2531 Open High Low Close .
Table 11: Changes in thePrice of Copper Open High Low .28 11. Copper Theprice levelo f differentperiod is quotedbelow.
84 Apr 13-19 343.Close Apr 6-12 328.56 314.4 350.92 369.0 May 4-10 350.8 354.24 343.6 343.32 362.92 319.32 Apr 27.72 .May 3 338.24 350.16 366.52 344.24 323.56 340.4 362.36 338.16 Apr 20-26 358.
68 It is shownint he figure below: Figure 11: Changes int he Price of Copper Thefigure shows that theprice of crudeoilco nsistso f upsand downs.314.48 353. Its highest price is Rs.Itsoverallprice curve is like a wave.32 325.28 363. 310 320 330 340 350 360 .64 364.64 May 25-31 346.76 327.May 11-17 355.sometimes it increases and sometimes its price decreases.52 and lowest is Rs.46 May 18-24 332.44 332.48 346.4.16 337.12 356.369.
both positive and negative (areat hat need tohave concern) are pointed out. They are listed below: 4.SUMMARY AND CONCLUSIONS While studying and analyzingt he Exchanges workingin Nepal.370 380 Apr 6-12 Apr 1319 Apr 2026 Apr 27May 3 May 410 May 1117 May 1824 May 2531 Open High Low Close 29 CHAPTER IV 4.1Summary finding .
commodity market has successfully attracted the enormous investors 2. 9. 7. Future price oft he commodity can be knownsot hat the farmers can cultivate the mostpro fitablea nd suitablefo r themselves 5.he dgingis not possible. 8. Due to this there is not as liquidity as the share market. Therefore the investors¶ are not fully secure about theirinvestment. By knowingt he possible future price oft he commodity. The main objective of commodity market is tohedge the risk associated with the future price change int he commodity. TheseNepalese exchangesareµ costbased¶becausepricing of commodity isbasedo n thepricing of theother foreign exchanger ather than the demanda nd supplyo f the buyer and seller respectively. 3. 6. Helpful fort he farmers to get the fair price oft he ir products. It is useful for the importersince they canhedge the risk associated in the import business by quotingt he price to customer based ont he future possible price of commodity. It seems that the commodity exchange has failed toestablish its objective of developing thefullybalanced marketwherepricerisk is mitigatedandprice discoveryare made. 4. Commodity market is not governed by any governing body. consumer canmaintainit s possible future expense budget and minimize the expenses by future contracts. One of the major roles oft he commodity market id the price discovery and price risk management. Since the price discovery is not made in Nepalese Exchanges. 30 .1. 10. In the short span oft ime.
Therefore theCOME N have stopped the transactions of agrobased product while the MEXis only doing the transaction not the physical delivery oft he goods. 14. Due tot he possibility of buyingt he commodity ofhigh cost just by keepingt he margin hasattracted many investors. 4. Exchanges is own and control by the limited shareholder where its transparency is the biggest question. Thecommodity thatare traded in the exchangeareo f different sizesa ndcost so that the investor have thechoiceo f selecting thecommodityo n thebasiso f thepricechange. 13. time duration and so on. The Marginmaintain by the investor while transactions is comparatively largert han thepaid up capitalo f the exchangeswhere there is no guaranteeo f safetyregarding investors¶wealth.11. commodity market hasgr o wn rapidly. Since there is no clear rules and regulation. Due to the lack of warehouse the physical delivery oft he agro based product is impossiblea ndcostly. 12. So these market cannot be said as the future market but rathert he µovert he counter¶ market. the market can be driven as pert he will. .I n thepastfew yearso f establishment. price oft he product. The market transaction isbasedo n speculation rather than the hedging and physical delivery oft he commodity.4 Conclusionsan d Recommendations Theresearchwasco nductedwith an objective to give insightsa bout thecommodity exchanges of Nepal.
com 33 Appendix Things to bekn own regarding future market. 2009.wikipedia.Isuggest that there should be governing body that regulates the exchanges like by Nepal Rastra Bank regulatingt he bank and financial institution. & Pant. Kathmandu: Buddha Academic Publisher and Distributors Pvt.Similarly the exchanges shouldfacilitate thewarehouse so that thephysical deliveryo f thego ods can be possible especially of agro-based products. H... 32 REFERNCES µAbhiyan¶ Weekly newspaper.mexnepal.com http://www. P.com http://www. R. Social Science Research and Thesis Writing.(4thed) http://www.So that the seller gets 31 thefull valueo f itspr oductwhile thebuyerspays thereal valueo f thepr oduct.comennepal. What isa Derivativecontract? Aderivative contract is anenforceable agreement whose value is derived from the value . Wolf. April 13. It alsohe lps toimprove the investors¶faith in thebusiness. k. (2005). They shouldo rganize theawarenesspro gramme regardingt he commodity market and its opportunities and threats Price discovery mechanism should be made by the interaction ofde mand and supply of thebuyer and seller for the safeguardo f the interesto f thefa rmers.June. 2009. Ltd.
currency. precious metal.All theco ntractsfo r delivery of goods.indices of commodities. bond. the underlying asset can be a commodity. . What is a forward contract? A forward contract is alegally enforceable agreement ford eliv ery of goods ort he underlying asset on a specific date in futureat a priceagreedo n the date of contract. whichare settledbypaymento f money differenceo r where delivery and payment is made after a period ofspecificdays. or. Fourmost common exampleso f derivative instrumentsarefo r wards.stocks etc. Futures are exchange -traded contracts to sell or buy standardizedfinancial instruments or physicalcommoditiesfo r delivery on a specifiedfuture dateat an agreedprice. Byelaws ofsome Associations give both the buyer and sellert he right to demand/give delivery.t hese are generally not used formerchandizing propose. FUTURES CONTRACTS What is a futurescontract? Futures Contract is specie of forward contract.Futurescontractsare usedgenerallyfo r 34 protecting against rich of adverse price fluctuation (hedging).Delivery is generally at the option of the sellers. futures. As the terms oft he contracts are standardized. However. provisions vary from Exchange to Exchange.stock.of anunderlying asset. are forward contracts. Isdelivery mandatory in futurescontract trading? Thepr ovision for delivery is made in theByelawso f theAssociations so as to ensure that thefuturesprices in commoditiesare in conformitywith the underlying. optionsa nd swaps/spreads.
suchas. relevantpolicieso f the Government and agricultural reports. Howarefutures pricesdetermined? Futures prices evolve from the interaction of bids and offers emanating from all overt he country . For being suitable for futures trading the market for commodity shouldbe competitive.Whatare thecommodities suitable for futures trading? All the commodities are not suitable for futures trading and for conducting futures trading. weather patterns. when onedoesn'town commodity? One doesn't need tohave the physical commodity or own a contract fort he commodity to .t here should be large demand for and supply oft he commodity no individual or group of personsacting in concert shouldbe in a position to influence the demando r supply. Thefundamentala nalysis isco ncernedwithbasic supplya nd demand information. How professionals predict prices in futures? Two methodsgenerally used for predicting futurespricesarefundamentalanalysisa nd technicala nalysis.which converge in the trading floor or the tradingengine. and technicala nalysis to time their entrya nd exist. e.. andco nsequently theprice substantially.i. How is it possible to sell. The marketfo r thecommodity shouldbefreefr om substantialgovernment control. carryover supplies. The commodity should have longs he lf-life and be capable ofstandardization and gradation. There shouldbefluctuations in price. The bid and offer prices are based on the expectations of prices on the maturity date. Technical analysis includes analysis ofmovement of prices int he past. Many participants use fundamental analysis todet ermine the direction of the market.
e. are paid. What is settlement price? The settlementprice is thepriceatwhichall theoutstanding tradesare settled. The method of fixing Settlement price is prescribed int he Byelaws of the exchanges. What isdelivery month? It is the specified month within which a futures contract matures. are performed otherwise than by physical delivery of goods. 35 What islo n g position? Ins imple terms. thereby dispensing with delivery of goods. What is short position? Short positionis net sold position. Can onegivedelivery againstfuturescontract? Futures contract are contracts ford eliv ery of goods. normally it is a weighted average of prices oftransactions both inspot and futures market duringspecified period. It is possible to repurchase the contract before the maturity.It is simplyagreeing to sell thephysical commodity at alaterdate orsell ings hort.long positionis a net bought position.if any. warehouse receipt).enter into a saleco ntract in futures market. i.t he world over. Why do weneed speculators in futures market? Participants in physical markets use futures market for price discovery and price risk . What iscash settlement? It is a process for performing a futures contract by payment ofmoney difference rather than by delivering thephysicalcommodityo r instrumentrepresenting suchphysical commodity (like.. profits orlosses. But most oft he futures contracts.
Info and Rating Reads: 902 . In fact.Futures market helps them to avoid speculation by entering into hedgeco ntracts.management.Speculatorsare such comparative study of Commodity Exchanges of Nepal(2009) Download this Document for FreePrintMobileCollectionsReport Document Report this document? Please tell us reason(s) for reporting this document Top of Form f59e6e57ca06f5f doc Spam or junk Porn adult content Hateful or offensive If you are the copyright owner of this document and want to report it. theywouldbecompelled to speculate on prices. which they can only if thereareparticipantswilling to accept therisk. The hedgers intend tosh ift price risk.It is however extremely unlikelyfo r every hedger to finda hedger counterparty with matching requirements. Report Cancel Bottom of Form This is a private document. in thea bsence of futures market. please follow these directions to submit a copyright infringement notice.
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