A STUDY ON WORKING OF COMMODITIES MARKET

CONTENTS TITLE CHAPTER-1 INTRODUCTION NEED OF THE STUDY OBJECTIVES OF THE STUDY SCOPE OF THE STUDY RESEARCH METHODOLOGY LIMITATIONS OF THE STUDY CHAPTER-2 INDUSTRY PROFILE COMPANY PROFILE CHAPTER-3 REVIEW OF LITERATURE CHAPTER-4 DATA ANALYSIS AND INTERPRETATION CHAPTER-5 FINDINGS SUGGESTIONS CONCLUSIONS BIBLIOGRAPHY 67 64 50 43 20 PG.NO. 04

ABSTRACT

A study has been conducted on the “STUDY ON WORKING OF COMMODITIES MARKET” in the ANAND RATHI SECURITIES LTD, Hyderabad Branch.

As we have stated earlier in the Executive summary the AnandRathi (AR) set up in 1994, is one of India’s fastest growing full-service securities firm with a presence in more than 300 locations across India and has offices in Dubai & Bangkok.

AR provides wealth management services, investment banking, brokerage & distribution services in the areas of equities, commodities, mutual funds and insurance. The group caters to the financial needs of diversified group of clients, which include the wellreputed Corporate Groups, Institutions, Foreign Investors, Individuals as well as wealthy families and was recently ranked by an Asia Money 2009 poll amongst South Asia’s top 5 wealth managers for the ultra-rich.

The firm's philosophy is entirely client centric, with a clear focus on providing long term value addition to clients, while maintaining the highest standards of excellence, ethics and professionalism. The entire firm activities are divided across distinct client groups: Individuals, Private Clients, Corporates and Institutions.

The scope of the study is limited to preparing questionnaire. who are investing in the commodities market to understand the preferences towards commodities market. . Finally the study is helped to me in many ways to acquire the knowledge about the trading in the stock exchanges and also customer behavior in doing the survey. it contains brief introduction. This report includes the findings and conclusions of the study done in order to give the better suggestions. and product profile . nature of the business. This study has done by conducting and analyzing the survey of the target clients in the Hyderabad city. analysis survey and survey is limited to Hyderabad city and even existing clients. This project report includes profile of the Anand Rathi securities ltd.The basic objective of the study is the how much investors are preferred to invest in the commodities market and to understand what are the reasons behind investing in the commodities market. For the analysis of data the SPSS package is used and using the simple bar graphs shows the data.

CHAPTER-1 INTRODUCTION
Introduction:
Commodity Futures are contracts to buy specific quantity of a particular commodity at a future date. It is similar to the index futures and stock futures but the underlying happens to be commodities instead of stocks and indices. Commodity futures market has been in existence in India for centuries. The Government of India banned futures trading in certain commodities in 70s.However trading in commodity futures has banned permitted again by the government in order to help the commodity products ,traders, and investors. World-wide , commodity exchanges originated before the other financial ex\changes. Infact most of the derivatives instruments had their birth in commodity exchanges. Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated exchanges, in which they are bought and sold in standardized Contracts. Commodity Future is a Derivative

instrument where the underlying asset is a commodity. Commodity future are exchanges traded contracts to sell or buy standardized futures contract.

Participants of Commodities Market:
The participants who trade in the commodity derivatives markets can be classified as follows;

(a) Hedgers:
Hedgers are participants who use commodity derivative instruments to hedge / eliminate the price risk associated with the underlying commodity asset held them. Hedgers are those who protect themselves from the risk associated with the price of an asset by using derivatives. A person keeps a close watch upon the prices discovered in trading and when the comfortable price is reflected according to his wants, he sells futures contracts. In this way he gets an assured fixed price of his produce.

In general, hedgers use futures for protection against adverse future price movements in the underlying cash commodity. Hedgers are often businesses, or individuals, who at one point or another deal in the underlying cash commodity. Take an example: A Hedger pay more to the farmer or dealer of a produce if its prices go up. For protection against higher prices of the produce, he hedge the risk exposure by buying enough future contracts of the produce to cover the amount of produce he expects to buy. Since cash and futures prices do tend to move in tandem, the futures position will profit if the price of the produce rise enough to offset cash loss on the produce.

(b) Speculators : Speculators are participants who bet on future movements in the price of an asset i.e. I commodity to make short term gain from the price movements. Commodity future s

give theme the leverage so to take risks on nominal margin payments and thereby increasing for bigger gains or losses. Speculators are some what like a middle man. They are never interested in actual owing the commodity. They will just buy from one end and sell it to the other in anticipation of future price movements. They actually bet on the future movement in the price of an asset. They are the second major group of futures players. These participants include independent floor traders and investors. They handle trades for their personal clients or brokerage firms. Buying a futures contract in anticipation of price increases is known as ‘going long’. Selling a futures contract in anticipation of a price decrease is known as ‘going short’. Speculative participation in futures trading has increased with the availability of alternative methods of participation. Speculators have certain advantages over other investments they are as follows: • If the trader’s judgement is good, he can make more money in the futures market faster because prices tend, on average, to change more quickly than real estate or stock prices. • Futures are highly leveraged investments. The trader puts up a small fraction of the value of the underlying contract as margin, yet he can ride on the full value of the contract as it moves up and down. The money he puts up is not a down payment on the underlying contract, but a performance bond. The actual value of the contract is only exchanged on those rare occasions when delivery takes place.

(c) Arbitrageurs:

rubber. . Another feature of commodities is that they are commonly available. in simple words are any goods that are common and unbranded. The players in the spot market are the actual producers and the consumers of the commodities. wheat. silver. You may be surprised to know that in the US commodities markets there are futures available even on cattle. Commodities. These markets can be broadly classified into spot market and futures market. jute. For e. To understand the commodity derivatives markets it’s necessary to clear about ‘commodities’. cotton etc. pepper. Producers. Commodity Derivatives: A commodity derivative derives its value from an underlying asset which is necessarily a commodity. consumers . Commodity markets represent the formal system for the interplay of demand for and supply of commodities.Arbitrageurs work at making profits by taking advantaged of existence of difference in prices of the same product across different markets (MCX and NCDEX). sugar. Commodities for immediate delivery are traded through the spot market. (d) Investors : Investors are participants having a a longer term view as compared to speculators when they enter into trade in the commodes market.etc. Eg Farmers.g.. Gold. apple juice can be a commodity whereas the ‘Real’ apple juice cannot be called a commodity. are some of the common commodities.

so that even if the prices happen to rise later. he can still manage to sell at the price at which the contract was struck. However in India options on commodities are not available and are expected to be introduced soon. the various derivatives based on commodities. so that even if the prices happen to fall after three months.The other type of market called the ‘Futures market’ is for facilitating contracts for future delivery. These are generally the actual consumers or the producers of the commodities. Arbitragers and investors. The large scale consumers of the products can also make use of the futures to secure their purchase. The players in the futures markets are Hedgers. Arbitraging is a very profitable business. Usually traded ones are the futures and options. For eg: A wheat farmer who expects his harvest to be over in 3 months time may sell a futures contract with an expiry of three months. they can take opposite positions in the futures market. The other major group of participants in the commodity futures market are the importers and the exporters. Since they have confirmed obligations to export/import fixed quantity of commodities at a particular period of time. Arbitrage is a process of making profits using the price differences between two markets without exposing oneself to any risk. It is . For eg: A cold drinks can manufacturing company may buy tin futures. Hedgers are those who hold simultaneous positions in the spot market also. thy can be assured of the supply of raw materials at the pre-determined price. (Please go through the material on ‘Futures and Options’ to understand about futures) These markets make available for trading.

Tokyo Winnipeg Commodity Exchange. of India permitted establishment of National-level MultiCommodity exchanges in the year 2002 and accordingly three exchanges have come into . Most commonly traded derivatives around the world are futures. Canada Major Commodity Exchanges: The Government picture. Investors are those who participate in the market for profits and are ready to face the risk involved in the market. Some of the most popular commodity exchanges in the world are listed below: • • • • • • • London Metals Exchange. because any price gap is closed immediately as soon the arbitragers enter the market. New York Chicago Mercantile Exchange. Mumbai.(MCX). Ahemdabad(NMCE). options and option futures. London Tokyo Commodity Exchange. London New York Mercantile Exchange. However in an ‘efficient’ market arbitraging is not possible.possible to arbitrage between two different futures markets or between the futures market and the spot market.  National Commodity and Derivative Exchange of India. Chicago Chicago Board of Trade. Mumbai(NCDEX).  Multi-Commodity Exchange of India Ltd. An investor can be anyone from an individual who has a small surplus income to the treasury desks of banks and corporate. Chicago London International Financial Futures and Options Exchange (LIFFE).  National Multi Commodity Exchange.

The two exchanges (NCEDX&MCX) have seen tremendous growth in less than two years.e. Forwards Market Commission works under the purview of the ministry of Food. The exchanges levy higher additional margin in case of excess volatility.7800 Crores.However there are regional commodity exchanges functioning all over the country. The exchange also requires the daily profits and losses to be paid in/out on open . Generally commodity futures require an initial margin between 5-10% of the contract value. Agriculture and Public Distribution. At NCDEX the contracts expire on 20th day of each month .therfore they provide great benefits of leverage in comparison to the stock and index futures trade on the stock exchanges. It has been believed by experts that the volumes on these exchanges would the stock market in the days to come. MCX and NCDEX.if 20th happens to be a holiday the expiry day will be the previous working day. AR commodities Broking Pvt.if 15th happens to be a holiday the expiry day will be the previous day.Ltd has got membership of both the premier commodity exchanges i. The expiry day differs for different commodities in both the exchanges. The daily average on these two exchanges put together has now grown to a healthy Rs. Commodity exchanges are regulated by Forwards Market Commission (FMC). The margin amount varies between exchanges and commodities. At MCX the expiry day is 15th of every month .

The expense of buying/selling $250. how liquid depends on the actual contract being traded.000 and could be bought/sold for as little as $20. It is a lot cheaper to buy/sell one futures contract than to buy/sell the underlying instrument. meaning that to take a position only a fraction of the total value needs to be available in cash in the trading account. orange juice etc are not so readily available to the retail trader and are more expensive to trade in terms of commission and spread. Liquidity The involvement of speculators means that futures contracts are reasonably liquid. However. Advantages of commodity trading: Leverage Commodity futures operate on margin. For example.positions (mark to Market or MTM) so that the buyers and sellers do not carry a risk of not more than one day. one full size S&P500 contract is currently worth in excess off $250. Electronically traded contracts.000 could be $2.500+. Ability to go short . such as the e-mini's tend to be the most liquid whereas the pit traded commodities like corn. Commission Costs.

Commodity futures do not suffer from this as they are not anticipating a particular strike price at expiry. Disadvantages of commodity trading: Leverage Can be a double edged sword. are deliverable although you will get plenty of warning and opportunity to close out a position before the truck turns up. most futures contracts are not deliverable and are cash settled at expiry. Online futures trading can help to reduce this time by providing the client with a direct link to an electronic exchange. . Not only are profits enhanced but so are losses! Speed of trading Traditionally commodities are pit traded and in order to trade a speculator would need to contact a broker by telephone to place the order who then transmits that order to the pit to be executed. like corn. However some. No 'Time Decay' Options suffer from time decay because the closer they come to expiry the less time there is for the option to come into the money. There is no 'uptick rule' for example like there is with stocks. You might find a truck of corn on your doorstep! Actually. Low margin requirements can encourage poor money management.Futures contracts can be sold as easily as they are bought enabling a speculator to profit from falling markets as well as rising ones. leading to excessive risk taking. This can take some take and the risk of slippage occurring can be high. Once the trade is filled the pit trader informs the broker who then then informs his client.

Gold M. Urad. Turmeric  Steel Long. Nickel. Refined Soy Oil. Guar Seed. Medium Staple Cotton  Chana. Cottonseed Oilcake. Basmati Rice. Wheat.  Gold. Copper. Long Staple Cotton. Tur  Rice. Groundnut Oil. Sarbati Rice  Crude Oil  Rubber. Guargum Bandhani. Steel Flat.Commodities traded in MCX. Guargum. Silver. Soy Seeds.  Agro Products  Arabica Coffee Cashew  Castor Seed Chana  Chilli Common Raw Rice  Common Parboiled Rice Crude Palm Oil  Cotton Seed Oilcake Expeller Mustard Oil . Tin  Kapas. Gold HNI. Silver HNI  Castor Seeds. Maize. Red Chilli. Silver M. Cottonseed  Pepper. RBD Palmolein. Gur. Jeera. Crude Palm Oil. Yellow Peas. Mustard Seed Oil. Castor Oil. Soymeal. Mustard Seed. Cashew Kernel. Guarseed Bandhani Commodities traded in NCDEX.

 Grade A Parboiled Rice Grade A Raw Rice  Guar gum Guar Seeds  Gur Jeera  Jute sacking bags Lemon Tur  Long Staple Cotton Maharashtra Lal Tur  Medium Staple Cotton Mulberry Green Cocoons  Mulberry Raw Silk Mustard Seed  Pepper Raw Jute  RBD Palmolein Refined Soy Oil  Robusta Coffee Rubber  Sesame Seeds Soyabean  Yellow Soybean Meal Sugar  Turmeric Urad  Wheat Yellow Peas  Yellow Red Maize  Base Metals  Mild Steel Ingots  Precious Metals  Gold  Silver .

brokerage & distribution services in the areas of equities. which is continuously strive to provide researched information and good services to meet its clients. mutual funds and insurance. Foreign Investors. which include the well-reputed Corporate Groups. The AR is customer focused stock broking unit. is one of India’s fastest growing full-service securities firm with a presence in more than 300 locations across India and has offices in Dubai & Bangkok. AR provides wealth management services. . researched information and efficiency being competitive. The group caters to the financial needs of diversified group of clients.NEED FOR THE STUDY The project report on “STUDY ON WORKING OF COMMODITIES MARKET” at Anand Rathi Securities. commodities. Individuals as well as wealthy families. Institutions. The AnandRathi (AR) set up in 1994. The main goal of the company is to give full satisfaction by providing good service. investment banking. Hyderabad Branch for as a Major concurrent project.

• • • market SCOPE OF THE STUDY It is the study entitled Working of the Commodities market and Investors preferences towards it in the Anand Rathi Securities Ltd. with a clear focus on providing long term value addition to clients. OBJECTIVES OF THE STUDY • • • • market • market affects the national trading activity. To identify the investment patterns of investors. Hyderabad Branch To identify the source of information about commodities market. To know reasons beyond the investors investing in the commodities To know whether the investor’s opinion about international commodities To understand the workings of the commodities market.STATEMENT OF PROBLEM This project deals with the study about “Working of the Commodities market and Investors preferences towards it” in stock broking concern. while maintaining the highest standards of excellence. To profile the commodities investors. ethics and . To study the investors’ preference towards commodities market. To know the how much people preferred to invest in the commodities The firm is entirely client centric.

professionalism. The scopes of the study are: • • • Analysis of activities of the commodities market Analysis of survey and this survey is limited to only Hyderabad city. Private Clients. RESEARCH METHODOLOGY The methodology of data collection pertains to information to how the data is collected i. either from primary sources or secondary sources. Corporates and Institutions. SOURCES OF DATA The sources of data can be classified in two categories: • • Primary sources Secondary sources PRIMARY SOURCES The primary data are collected by the detailed discussion was conducted with the Branch Manager of AR Ltd and Intractions was carried with the Commodities investors (customers). Analysis questionnaire and suggestions for improvement.e. . It explains the methods utilized and the instruments used in data collection. The entire firm activities are divided across distinct client groups: Individuals.

.And the discussion was carried out with the college internal guide. They are: • • • Information from the text sources Information form the internet sources Information from the materials provided by the concern SAMPLING DESIGN • • • Sampling unit Sampling Size :Questionnaire :50 units Sampling procedure : Direct STATISTICAL TOOLS AND TECHNIQUES To analysis the data we used bar graphs periodically. SECONDARY SOURCES I used secondary sources also for collecting the data. who helped in developing the objectives and validating their conformance to the ethical framework of the project.

future movement on gold price may or may not be similar • The investors in Hyderabad are not much aware of commodity market and the commodities being traded in the commodity market. awareness about the commodity market and the commodities being traded. The suggestion is based on the study on Fundamental and Technical Analysis such as price movement. . Volumes and Open Interest (OI).LIMITATIONS OF THE STUDY • survey. The given time for the project is not sufficient. • • • • • The all commodities investors were not easily available for the conducting the Some of them they were not ready to fill the questionnaire. • This analysis will be holding good for a limited time period that is based on present scenario and study conducted. Due to the busy work schedules getting the information was difficult. Relationship of gold with other factors. The scope of the survey is limited to Hyderabad city only. So.

MCX allows trading on a host of commodities ranging from bullion to grains. There have been over 20 exchanges existing for commodities all over the country. However in 1975 the Government banned forward contracts on commodities. The MCX is Mumbai-based and is promoted by Financial Technologies Pvt Ltd. However these exchanges are commodity specific and have a strong regional focus. Later in 2003 the Government of India again allowed forward contracts in commodities. Recently on 11th August 2004.950 Crores. Accordingly three exchanges are there which deal in a wide variety of commodities and which allow nation-wide trading. The Government. in order to make the commodities market more transparent and efficient.MCX crossed a peak daily turnover of Rs. Please check the ‘Commodities traded’ menu’. accorded approval for setting up of national level multi commodity exchanges. MCX has become the first exchange in the world to launch futures on steel.CHAPTER-2 INDUSTRY PROFILE Indian Commodities Market: In India commodity markets have been in existence for decades. .

1952 or any other applicable law. The Regulations have been divided into two main divisions pertaining to Trading and Clearing for sake of convenience only and both the divisions shall be read together wherever and whenever the context requires. as in force and any other applicable laws of India. Regulations. EXTENT AND COMMENCEMENT The Regulations framed hereunder shall be known as National Commodity & Derivatives Exchange Limited. These Regulations shall be in addition to the provisions of the Forward Contracts (Regulation) Act 1952 and Rules framed there under and Rules and Byelaws of National Commodity & Derivatives Exchange Limited (herein referred to as ‘NCDEX’ or ‘Exchange’). 2003 (herein referred to as ‘Regulations’) and shall come into effect immediately on approval by the Forward Market Commission or any other authority appointed under the Forward Contracts (Regulation) Act. National Commodity & Derivatives Exchange Limited Regulations for Spot and Derivatives Market 10 / 152 .National Commodity & Derivatives Exchange Limited (NCDX) Regulations for Spot and Derivatives Market 1 TITLE. The titles of the clauses are only for convenience and may not read as subject for the contents of clauses.

and defined in the following. or paid. shall have the meanings respectively assigned to them therein in the following order of priority: (i) Forward Contracts (Regulation) Act 1952 and Rules framed thereunder. known as the "settlement date. all words and expressions used herein but not defined. 1956 (iii) Rules of National Commodity & Derivatives Exchange Ltd (iv) Byelaws of National Commodity & Derivatives Exchange Limited Commodity futures and option contracts A futures contract is a legally binding agreement between two parties to buy or sell in the future. Bye Laws or Rules of the Exchange. a specific quantity of a commodity at a specific price." Although .2 JURISDICTION Unless specifically mentioned otherwise in these Regulations. (ii) Companies Act. on a designated exchange. for at a set time in the future. The buyer and seller of a futures contract agree now on a price for a product to be delivered. any matter arising out of or pertaining to these Regulations shall be Clearing Member subject to jurisdiction of the Courts of Mumbai irrespective of the place of business of Trading or Clearing Members and irrespective of place from where the transaction is entered Into National Commodity & Derivatives Exchange Limited Regulations for Spot and Derivatives Market 3 DEFINITIONS Unless in the context it is explicitly stated otherwise.

a person who goes to the newsstand to buy a magazine may find it is more convenient to contract with the publisher for delivery at home. is the cash market. some stores carried the sign. An option on a commodity futures contract is a legally binding agreement between two parties that gives the buyer. Sometimes. within a specific time period. The buyer finds the precise commodity that suits him--perhaps an orange that has ripened to the proper degree--pays his money and becomes the owner of the merchandise. to exercise his option. who pays a market determined price known as a "premium. For example. The buyer and the seller agree today on a description of the product that will be delivered . "cash and carry." the right (but not the obligation). and such contracts are widely used in many types of business. an option may confer the right to buy or sell the underlying asset directly. most futures contracts are actually closed out or "offset" prior to delivery. and the one most widely used in all forms of business to transfer title to goods. in its simplest form. It's a time-tested market system. and these options are known as options on the physical asset. Cash and Forward Markets In the days before credit was readily accessible." In some cases. This modification is called a forward contract." meaning: pay your cash and carry away the merchandise you purchased. Exercise of the option will result in the person being deemed to have entered into a futures contract at a specified price known as the "strike price. cash markets can be modified and improved to serve a particular purpose.actual delivery of the commodity can take place in fulfillment of the contract. That.

the quality of the commodity frequently is not known. . and merchandiser to ascertain their likely cost for coffee and develop long range plans is limited. no one knows the exact total supply of a commodity. and inventory figures are not precise.in satisfaction of the contract. Thus contributing to the complexity of determining an appropriate price. The buyer makes payments as agreed. such as coffee. Prices and Price Factors In a competitive market system. there are many relatively small producers scattered over a wide geographic area. Futures trading. processor. These widely dispersed producers find it difficult to know what prices are available. as is new production. with commodities that compete in world or national markets. provides the industry with a guide to what coffee is worth now as well as today's best estimate for the future. and the opportunity for producer. used in the Midwest for grains and similar farm commodities since 1859. and adapted for coffee in 1955. However. The prices at which sellers offer to sell their goods and buyers bid to buy them are based on their best current assessments of the supply and demand for the commodity. Usually. buyers and sellers determine prices for commodities through their transactions in the marketplace. and the seller will deliver the asset at a designated site on a specified date. in the United States most commodities are produced by many firms. For example. The total supply available usually is an estimate. Storage and ownership also are fragmented. The system works quite well when the cost of producing the commodity is known and the selling price is presently acceptable to a buyer. In addition.

markets must cope with such unknowns. . some who may have planned to use a product may decide to use less. users will deplete existing supply and a shortage may develop. if the price is right. for example. Price is a rational. the supply of a commodity should balance the demand for it--production should match use. Since most commodities trade internationally and are affected by incompletely reported situations in other countries.Even with its problems. price influences production and consumption. Changing prices may alter consumers' intentions regarding the quantity of a close substitute commodity they want--or whether they want it at all. based as it is on what people may decide they wish to buy. Demand is even more difficult to measure. Markets are the nerve system of our decentralized economic system. enabling us to respond stimuli and produce goods and services efficiently and changing prices force to adjust and moderate our consumption pattering. If enough users are priced out of the market. or they may select a substitute--eat chicken instead of beef. go without. If the price is too low. price may turn down which may encourage more use and discourage production. If the price is too high. prices are the impulses conveyed throughout the system. U. commodity price reporting system generally is better and reports are more available publicly than commodity reports from many other countries.S. Markets and prices play vital roles in our economy system and help to determine our standard of living. Subsequently. In other words.S. prices for goods in the marketplace play a vital role in our economic system and help to efficiently allocate scarce resources. prices may rise. the U. which will tend to discourage marginal buying. However. The availability of a substitute may change the demand picture for the original product as well as for the related one.

he would have a loss if prices fell. futures markets provide a competitive way for commodity producers. To hedge. Since the merchant owns the commodity. to hedge an unsold inventory of cotton with a sale of an equivalent amount of futures contracts. While there is no way to eliminate uncertainty. and others who may own the actual commodity to transfer some price risk to speculators who will willingly assume such risk in hopes of making a profit. Processors and merchandisers are guided by the prices that people are willing to pay for their goods. and at contract expiration converge to one price. parallel to each other). When the . it supplies information on price which reflects buyers' and sellers' current view on a commodity's value and provides a means to transfer the price risk of holding these items in inventory for later sale. for example. merchandisers. Now if prices drop. Transferring Risk: Hedging Commodity production and marketing involve sizable price risks. Once in the marketing system. based on estimates of what consumers are willing to buy and how much they are willing to pay. goods are channeled from point of production to processor and distributor and on to the consumer. and risk represents a cost which affects the value of a commodity. it is possible for a cotton merchant.Should price remain relatively high this would likely promote production or attract additional supply of good. the cash market loss will be at least partially offset by a gain on the futures contract. processors. Since futures and cash prices tend to move together (that is. The process of hedging involves the concurrent use of both cash and futures markets. Their marketing decisions are made independently. the merchant would sell futures contracts. Futures trading does not enter directly into these channels.

For instance. silver or platinum by buying a futures contract. A jewelry manufacturer can determine the cost for gold. but does not own enough cotton to produce the cloth. unsold inventory can sell futures contracts that will protect the value of the inventory. Hedging permits forward pricing of products. Quoting such a price before buying the cotton would make him vulnerable to a price rise. He now has a price for raw material to which operating and production costs can be added to arrive at a base price for cloth. a livestock feeder does not have to wait until his cattle are ready to market before he can sell them. even if the price of the commodity drops. he has some assurance that a rise in futures prices would lessen the impact of a rise in the cost of the actual cotton. but having bought futures in a quantity equivalent to his needs. translate that to a price for the finished products. He can take advantage of good prices even though the cattle are not ready for market. Here are three examples of how hedging helps the cash market work better: Hedging stretches the marketing period. Hedging protects inventory values. he will simultaneously lift his hedge by buying back his futures contracts at the lower price. could hedge by buying enough futures contracts to cover the forward sale of cloth. Conversely. Having . a cotton mill owner who wanted to sell a customer a quantity of cloth for delivery some months from now. A merchandiser with a large. and make forward sales to stores at firm prices. The futures market permits him to sell futures contracts to establish the approximate sale price at any time between the time he buys his calves for feeding and the time the fed cattle are ready to market. some four to six months later. The gain on his futures contracts should roughly equal the merchant's loss in the cash market.merchant sells his inventory at the lower cash market price.

silver. but not the obligation. It requires skill and knowledge acquired only by study and experience. These are just a few ways that futures markets are used by commodity owners. There are many factors to consider in deciding whether to hedge with futures. while a hedge transfers price risk.made the forward sales. For this reason. or simply forward contract in the cash market. the holder of a put option can protect against a drop in the value of that inventory. But market users should be forewarned that hedging is not an academic exercise. the buyer of an option can acquire the right. to buy or sell a futures contract at a specified price within a specified period of time (as stated in the option contract). options on the actual commodity and/or options on futures contracts are popular among people who seek price protection. With the payment of a premium. . but remain free to gain from an increase in the price of the commodity held in inventory. Finally. buy or sell an option on a futures contract. for example. it also denies the opportunity to gain from favorable price movements in the cash market. Adapting basic principles to individual situations tests the ingenuity of hedgers and demonstrates the management flexibility provided by futures trading. In this way. the manufacturer can use its capital to acquire only as much gold. A detailed discussion of this topic goes beyond the scope of this brief publication. For more information. consult your library or contact the exchange which trades the commodity of interest. but who do not wish to miss a favorable price movement. or platinum as may be needed to make the products that will fill its orders.

AR provides a breadth of financial and advisory services including wealth management. founded in 1994 by Mr. brokerage & distribution of equities. the brokers.all of which are supported by powerful research teams. The entire firm activities are divided across distinct client groups: Individuals. . AnandRathi.PROFILE OF THE COMPANY Introduction: AnandRathi (AR) is a leading full service securities firm providing the entire gamut of financial services. with a clear focus on providing long term value addition to clients. The company is also maintaining an excellent relationship with the clients. Corporates and Institutions. investment banking. Private Clients. corporate advisory. commodities. The firm. today has a pan India presence as well as an international presence through offices in Dubai and Bangkok. ethics and professionalism. the employees. and the bankers. The firm's philosophy is entirely client centric. mutual funds and insurance . while maintaining the highest standards of excellence.

Maharastra state.2nd Floor. Pradeep Gupta Vice Chairman Mr. CTS NO.400 023. Hyderabad AP Pin : 590006 Tel : 0831-4207300/ 3098234 FINANCIAL AND ADVISORY SERVICES . J K Somani Building British Hotel Lane Mumbai Samachar Marg Mumbai . 14 Khanapur Road. AnandRathi Group Chairman Mr.OFFICE (Head Office) 3rd Floor.PROFILE COMPANY HISTORY OF THE PLACE The Anand Rathi Securities LTD was established in the year of 1994 in Mumbai. Tilakwadi. REGD. Amit Rathi Managing Director BRANCH OFFICE Sri Krishna Towers. Tel: 91-22-6637 7000 Fax: 91-22-6637 7070 MANAGEMENT TEAM OF THE COMPANY Mr. India.

• • • • Wealth management Investment banking Corporate Advisory Brokerage and Distribution of Equities. The aim is however common .to go far deeper than others. Clients deal with a relationship manager who leverages and brings together the product specialists from across the firm to create an optimum solution to the client needs. . investment banking. real estate. distribution of mutual funds. Management Team AR brings together a highly professional core management team that comprises of individuals with extensive business as well as industry experience. merger and acquisitions. Research teams across the firm continuously track various markets and products. IPOs and insurance products. corporate finance and corporate advisory. Commodities. Mutual Funds and Insurance CLIENTS OR CUSTOMERS • • • • Individuals Private clients Corporates and Institutions AR Core Strengths Breadth of Services In line with its client-centric philosophy. to deliver incisive insights and ideas and be accountable for results. In-Depth Research AR’s research expertise is at the core of the value proposition that we offer to our clients. the firm offers to its clients the entire spectrum of financial services ranging from brokerage services in equities and commodities.

to offer them personal advice and expert analysis that they need to make their assets go the Extra mile. .AR offers the most extensive platform of customized servicing. coupled with long hours of practice and research are the key drivers. Firm’s ability to think far ahead and formulate a long-term strategy. individual strategies and products to help meet the requirements of the affluent private investor. The company believes that the key to build wealth lies in allocating assets across various markets. to help maximize returns and minimize risks. which includes AR's highly rated research. grow and transfer their wealth. Philosophy: The Anand Rathi tries and understands client’s financial needs. Keeping this in mind the firm leverage it’s expertise in scientific asset allocation.Management Team Firm’s senior Management comprises a diverse talent pool that brings together rich experience from across industry as well as financial services. a desire exists within wealthy families to simplify the management of multigenerational needs and lessen the profound emotional impact of wealth on family members. which make investors wealth work harder for them. The products/services of the Anand Rathi are as follows: 1. In addition. Working closely with specialists across firm PWM offers an array of products & services. financial instruments and industry sectors. integrated investment strategies to address your wealth management needs. We provide comprehensive. Individuals (a) Private wealth management Introduction: Affluent individuals need sophisticated advice and strategic guidance to capitalize on opportunities to preserve.

The firm has excellent research team.Process: The firm realize the need to simplify the complexities of the investment strategies and it achieve this by offering highly customized private wealth management . The team provides support in fine-tuning the investment strategy & suggests how to capitalize on these opportunities. to deliver incisive insights and ideas and be accountable for results. Products: • Equity & Derivatives • Mutual Funds • Depository Services • Commodities • Insurance Broking • IPOs Research: It’s research expertise is at the core of the value proposition that they offer to its clients.to go far deeper than others.The firm’s Personalized Relationship Managers along with the expert team of analysts and advisors will assist to investors in analyzing all their investment needs and advice them on specialized solutions created exclusively for them. . AR research processes incorporate quantitative areas well as qualitative analyses. The aim is however common . This multi-pronged approach helps us to provide superior riskadjusted returns for our clients. Research teams across the firm continuously track various markets and products. who constantly screens the market for investment prospects.

AR analysts provide objective and decisive research that is designed to enable clients to make informed investment decisions. They also cover the global markets. email. Its success lies in the firm philosophy of providing consistently superior. fixed income. Consistent delivery of high quality advice on individual stocks. sector trends and investment strategy has established us a competent and reliable research unit across the country. The AR team firmly believe in the importance of selecting appropriate asset allocations based on the client's risk profile. They are supported by dedicated sales & trading teams in its trading desks across the country. Clients can trade through us online on BSE and NSE for both equities and derivatives. to give clients an unparalleled macro-view of the investment opportunities across the globe. Research and investment ideas can be accessed by clients either through their designated dealers. . and commodities to currencies. independent and unbiased advice to their clients backed by in-depth research. b) Brokerage and distribution Equity & Derivatives Brokerage: AnandRathi provides end-to-end equity solutions to institutional and individual investors. The team covers entire spectrum of financial markets from equities. web or SMS Mutual Funds: AR is one of India's top mutual fund distribution houses.

of which insurance is an integral part. Its research covers a broad range of traded commodities including precious and base metals. It offer to the investors daily updated internet access to their holding statement and transaction summary. The firm’s commodities broking services include online futures trading through NCDEX and MCX and depository services through CDSL. AR provide to its clients comprehensive risk management techniques. registration of shares and dematerialization. In addition to transaction execution. investment ideas and arbitrage opportunities to clients. AR’s guiding philosophy is to manage the clients' entire risk set by providing the optimal level of cover at the least possible cost. The firm deals with both life insurance and general insurance products across all insurance companies. jeera and cotton. chana. Risk management includes identification. guar gum and spices such as sugar. Commodities: Commodities broking . Oils and Oilseeds. clearing and custody of securities. the firm provides customized advice on hedging strategies.The firm’s depository services include settlement. measurement and assessment of the risk and handling of the risk. Commodities broking is supported by a dedicated research cell that provides both technical as well as fundamental research. . guar.a whole new opportunity to hedge business risk and an attractive investment opportunity to deliver superior returns for investors.Depository Services: AR Depository Services provides to investors with a secure and convenient way for holding their securities on both CDSL and NSDL. both within the business as well as on the personal front. agri-commodities such as wheat. Insurance Broking: As an insurance broker.

a wide network of branches across India. Its IPO research team provides clients with in-depth overviews of forthcoming IPOs as well as investment recommendations.The entire sales process and product selection is research oriented and customized to the client's needs. strong distribution capabilities and a dedicated research team The firm has been consistently ranked among the top 10 distributors of IPOs on all major offerings. AR services : • • • • • • • Risk Management Due diligence and research on policies available Recommendation on a comprehensive insurance cover based on clients. Maintain proper records of client policies Assist client in paying premiums Continuous monitoring of client account Assist client in claim negotiation and settlement IPO’s: The firm is a leading primary market distributor across the country. Its strong performance in IPOs has been a result of its vast experience in the Primary Market. We lay strong emphasis on timely claim settlement and post sales services. . Online filling of forms is also available.

There is an extensive focus on research on companies. coupled with excellent execution capabilities. investors get the best of both worlds .real understanding of their investment needs as well on-the-ground expertise. The institutional equity team tracks nearly 250 large and mid-sized companies to give clients an unparalleled breadth of ideas. . With it will dedicated NRI desk in India and Relationship Managers investors own country. It provides the following services for NRIs.Indian and Global 2. A highly experienced and reputed team of equity analysts supports the sales team.( c) NRIs Introduction: AR is the perfect gateway to the wealth of investment opportunities in India for Non-Resident Indians. sectors and macro-economy. • • • • Superior understanding of the Indian economy & markets Ability to structure and manage your tax and regulatory compliances Dedicated relationship team Unparalleled product range . Institutions (a) Institutional Equities Introduction: The Institutional sales and trading team provides cutting edge market information and investment advice to clients.

It also provide Investment Advisory Services for institutional clients in India and overseas for investment in the Indian equity markets

(b) Managed Investment services
Portfolio Management Services (PMS): AR Portfolio Management Service is a discretionary investment service created to meet the demand for more targeted investment styles and opportunities. It offers a range of specialized investment strategies designed to capture opportunities across the market spectrum. The range of products varies from the highly defensive, capital-protected to the most aggressive strategies in the equities and derivatives markets.

The firm’s investment process ensures that investors’ strategy and portfolio are built on solid foundations. Together clients and their relationship manager select the strategy in line with their individual goals. AR investment specialists then construct and manage clints portfolio in accordance with the chosen investment strategy.

Real Estate Opportunities Fund: AR Real Estate Opportunities Fund is a private equity fund for high net-worth individuals, corporate and institutions, to invest in equity-linked instruments in the Indian real estate and infrastructure sectors. As part of the structural reforms to further boost India's economic growth, the government has recognized the need for institutional finance in the real estate sector. In early 2005, the government has relaxed the FDI guidelines in real estate and also allowed the setting up of real estate investment funds under SEBI guidelines. These developments are expected to provide much needed capital to provide for the increasing demand for

quality real estate in major urban centers across the country.To capture this opportunity, AR has brought together a team of specialists and advisors to guide the fund's investments who bring together expertise in the areas of real estate consulting, development, legal and financial structuring.

3. Corporate
(a) Institutional wealth management Introduction: Corporate and Institutional treasuries need ever more sophisticated advice that is backed by serious and credible research. AR IWM provides its institutional clients integrated wealth management solutions across global markets, which are backed by proprietary global economic & investment research.

(b) Investment banking and corporate Finance Introduction Investment Banking: AR Investment Banking provides comprehensive services to clients including raising money in the equity capital markets to identifying strategic alliances, mergers and acquisition opportunities and debt financing & restructuring advisory.

Corporate Finance: The AR Corporate Finance team helps clients manage their debt-financing needs by profiling business and cash-flow risks, defining the alternative sources of funding , building in multiple variables such as currencies, fixed-floating, tenure, collateral etc. in a

comprehensive manner and finally negotiating with the prospective lenders / buyers. The team has also built an impressive track-record in debt restructuring based on its superior understanding of business needs and relationships with key lenders. The Corporate Finance team has handled assignments in businesses like paper, hospitality, telecom, textiles and sugar. Services Investment Banking: Merchant Banking: A highly experienced equity capital markets team, a pan-India distribution presence and a high level of quality and integrity in executing client's transactions has enabled us to provide tangible value to the firm’s clients' businesses.

the firm bring quality independent advice and excellent execution capabilities to create landmark transactions for clients. The firm’s track record of successfully lead managed IPOs includes Tips Industries, Emami, HCL Infosystems and Provogue.

M&A, Private Equity: The firm’s Mergers & Acquisition team works with clients in creating lasting stakeholder value through advice on mergers, acquisitions, divestitures and private equity financing. The team leverages on the firm's superior understanding of businesses and tax and regulatory environments as well as a deep network of relationships across the professional and corporate world.

the firm has been worked extensively with clients in industries like cement, sugar, chemicals, power and textiles for mergers and acquisition deals, valuation and business

organisational and operational restructuring. to profit improvement and business turnaround strategies. utilising firm’s unparalleled business know-how to give you the competitive edge. Highly qualified and thoroughly professional. experts and associates assist to clients in conceptualising problems and devising effective solutions. Review & Control Mechanism . its specialists. Successful assignments undertaken for leading organisations in India as well as overseas bear ample testimony to our wide-ranging capabilities. Business & Organizational restructuring Business Turn-around Strategies Management Systems: MIS. (c) Corporate Advisory services Introduction: AnandRathi Advisors assists companies in realizing tangible improvements in various facets of their businesses by providing a range of corporate advisory services that includes the entire gamut from financial. whatever be clients need. Services • • • • • Performance Improvement and Cost Reduction Business Strategy and Re-engineering Financial.restructuring.

(d) Cross-Border Advisory Introduction: Dynamic Orbits is the international interface of Anand Rathi Group. inter alia Dynamic Orbits is engaged in building strategic alliances. outsourcing contracts. contract manufacturing alliances. cross border joint ventures and cross border acquisitions. .

Recently on 11th August 2004.CHAPTER-3 REVIEW OF LITERATURE Indian Commodities Market In India commodity markets have been in existence for decades. NCDEX is promoted by an elite group of financial institutions including NSE. However these exchanges are commodity specific and have a strong regional focus. accorded approval for setting up of national level multi commodity exchanges. Please check the ‘Commodities traded’ menu’. . MCX allows trading on a host of commodities ranging from bullion to grains. They are • • • Multi Commodity Exchange (MCX) National Commodities Derivatives Exchange (NCDEX) National Multi Commodity Exchange (NMCE) The MCX is Mumbai-based and is promoted by Financial Technologies Pvt Ltd. UBI etc. MCX crossed a peak daily turnover of Rs. SBI. There have been over 20 exchanges existing for commodities all over the country. Accordingly three exchanges are there which deal in a wide variety of commodities and which allow nation-wide trading. in order to make the commodities market more transparent and efficient. NCDEX also allows trading of futures on a host of commodities. Later in 2003 the Government of India again allowed forward contracts in commodities.. LIC.950 Crores. MCX has become the first exchange in the world to launch futures on steel. However in 1975 the Government banned forward contracts on commodities. The Government.

National Commodities and Derivatives Exchange. Further. Our service matrix is holistic with a gamut of advantages. pulses and cotton through a well-systematized trading platform. Our wide national network. Regular trading workshops and seminars are conducted to hone trading strategies to perfection. Our commitment to excel in this sector stems from the immense importance that commodities broking has to a cross-section of investors &ndash. exporters. we are focused on taking commodities trading to new dimensions of reliability and profitability. into a sophisticated and scientific investment option. Our technological and infrastructural strengths and especially our street-smart skills make us an ideal broker. weekly and monthly newsletters. NCDEX At Karvy Commodities. spanning the length and breadth of India. importers. We have made commodities trading. Every move made is a calculated one. farmers. However. the first and foremost being our legacy of human resources. technology and infrastructure that comes from being part of the AR Group. an essentially age-old practice. commodities market. further supports these advantages. personalized service is provided here by a dedicated team committed to giving hassle-free service while the brokerage rates offered are extremely competitive. based on reliable research that is converted into valuable information through daily. because of its . calls and intraday alerts. Here we enable trade in all goods and products of agricultural and mineral origin that include lucrative commodities like gold and silver and popular items like oil. manufacturers and the Government of India itself. Commodities market essentially represents another kind of organised market just like the stock market and the debt market.

thereby ironing out any change in prices that happen subsequently. which means that they are capable of being used as effective hedging instruments providing better diversification. exporters. there is every chance that the price of your produce may come down drastically at the time of harvest. futures can help you as follows: • Lock-in the price for your produce – If you are a farmer.. Commodity futures help you to procure or sell the commodities at a price decided months before the actual transaction. If you are a producer of a commodity. corporate etc. If you are an importer or an exporter. commodities futures can help you in the following ways… • Hedge against price fluctuations – Wide fluctuations in the prices of import or export products can directly affect your bottom-line as the price at which you import/export is fixed before-hand. importers. commodities futures represent a good form of investment because of the following reasons. • Less Manipulations . • High Leverage – The margins in the commodity futures market are less than the F&O section of the equity market. What can commodity market offer ? If you are an investor. producers. as they are governed by international price movements are less prone to rigging or price manipulations. • Diversification – The returns from commodities market are free from the direct influence of the equity and debt market. By taking positions in commodity futures you can effectively lock-in the price at which you wish to sell your produce .Commodities markets.unique nature lends to the benefits of a wide spectrum of people like investors.

handing over the precious metal to the buyers. necessary quality certifications. This is signified with the surging trading volume in bullion contracts and high open interest entering the settlement period resulting in healthy quantities getting physically delivered. You can avoid this risk by buying a commodity futures contract by which you are assured of supply of a fixed quantity of materials at a pre-decided price at the appointed time. The effective mechanism of settlement and delivery procedures adopted and employed by MCX has once again undergone rigorous tests and have come out extremely successful. here is how this market can help you: • Control your cost – If you are an industrialist. • Ensure continuous supply – Any shortfall in the supply of raw materials can stall your production and make you default on your sale obligations. This whole process underscores the efficacy & transparency of the complete trading. the raw material cost dictates the final price of your output. The . If you are a large scale consumer of a product. Selling commodity futures contract can give you assured demand at the time of harvest. etc was completed in flat 5 days period. The complete delivery procedure right from getting the possession of the precious metal from the sellers. By buying commodity futures. consignment movement. Any sudden rise in the price of raw materials can compel you to pass on the hike to your customers and make your products unattractive in the market. you can fix the price of your raw material.• Assured demand – Any glut in the market can make you wait unendingly for a buyer. settlement and delivery process employed by MCX.

Department of Commerce. The first meeting for the Gold Committee is being held under the Chairmanship of Commerce Secretary on 10th December 2004. India is the largest importer for Gold in the world. realizing this potential of Gold. Gold & silver futures contracts are getting recognized as the most reliable & dependable investment options that are today available to traders and investors who are looking to widen their portfolio beyond equity instruments.complete process has been worked out at a very optimal cost and on an average each participant involved in the delivery process had incurred only Rs. 350/. MCX is a member of the committee and looks forward to contributing suggestions on the role that Futures market can play in making India a global gold trading hub. Gold has seen a cumulative physical delivery of 245 kgs and Silver 2190 kgs across all the settlements completed before the current settlement. . Government of India has set up a committee to examine the regulatory structure of the gold industry to make India a gold trading hub. around 800 tons per year.per transaction. Ministry of Commerce & Industry. In all the previous settlements also MCX platform has always seen appropriate percentage of open interest position resulting in physical delivery. This committee is constituted under the Chairmanship of Secretary. This is because of the credibility that these commodities have enjoyed globally and the technical & fundamental analysis that has gone in arriving at various trading strategies.

India is the largest consumer of . old gold scrap and net disinvestments of invested gold.About Multi Commodity Exchange of India Ltd. Apart from being used for adornment purpose. Rubber. Net producer hedging and Implied investment. 66% was from mine production. Key shareholders of MCX are Financial Technologies (India) Ltd. digital exchange facilitates online trading. Headquartered in Mumbai. Out of the total supply of 3870 tons last year. Union Bank of India. Pulses and Soft commodities. official sector sales of global central banks. Black Pepper. But most importantly. it has most often been treated as an investment. Cotton. Demand globally emanates from fabrication (jewellery and other fabrication). Silver. a state-of-the-art nationwide. Agri Commodities. Bar hoarding. State Bank of India. In India. it has also served as an asset of the last resort and a hedge against inflation and currency depreciation. Ferrous and Non-Ferrous Metals. MCX. (MCX) an independent and demutualised multi commodity exchange. Corporation Bank & Canara Bank. Wheat and Rice. 20 % from old gold scrap and 14% from official sector sales. MCX is led by an expert management team with deep domain knowledge of the commodity futures markets and has successfully established a thriving digital market for trading in Gold. Bank of India. Gold continues to occupy a prominent part in rural Indian economy and a significant part of the rural credit market revolves around bullion as security. (MCX) Multi Commodity Exchange of India Ltd. The collapse of equity markets and the arrival of low interest rates have increased the investor presence in alternative investments such as gold. Gold supply primarily comes from mine production. Steel. gold has traditionally played a multi-faceted role. clearing and settlement operations for a commodities futures trading. Kapas. Oil & Oil Seeds. has permanent recognition from the Government of India.

especially in the gold market where India is the largest importer. scheduled commercial banks are authorized by the Reserve Bank of India (RBI) to import gold and silver for sale in domestic market without an Import license or surrendering the Special Import License (SIL). . UBI etc. fabricators. India has traditionally been a price seeker in the global bullion market. India has more than 13. NCDEX also allows trading of futures on a host of commodities. SBI. The wholesale traders. etc. fabricators and investors do not have any effective tool to hedge their price risk in gold / silver. NCDEX is promoted by an elite group of financial institutions including NSE. Bullion is imported into India by banks and four designated trading agencies acting as canalizing agents and consignees for overseas suppliers.. Bullion trading in India received a major fillip. The following tables indicate the various commodities traded in both exchanges and also the critical information regarding the various contracts. Following the changes in the Gold Policy announced by the Government of India. Inspite of its predominant position. The price risk is borne either by the fabricator or the retail consumer. which translates to around Rs 6. in 1997 under export-import Policy 1997-2002. who in turn sell to domestic wholesale traders.50. As per the policy.gold in the world accounting for more than 23% of the total world demand annually.000 tonnes of hoarded gold. LIC.000 crore. According to unofficial estimates.

CHAPTER-4 INTERPRETATION OF THE DATA .

005 0.002 -0.001 -0.001 -0.004 0.002 0.42857 returns _ -0.002 -0.005 sd 0.003 0.004 1-Dec-10 GOLD 2-Dec-10 GOLD 3-Dec-10 GOLD 5-Dec-10 GOLD 6-Dec-10 GOLD 7-Dec-10 GOLD 8-Dec-10 GOLD 9-Dec-10 GOLD 10-Dec10 12-Dec10 13-Dec10 14-Dec10 15-Dec10 16-Dec10 GOLD GOLD GOLD GOLD GOLD GOLD total avg Commodity Channel Index analysis: .002 -0.001 0.Analysis & Interpretation of gold -I Commodity Date Symbol Close(Rs) 18695 18663 18691 18651 18479 18501 18481 18560 18571 18518 18629 18531 18565 18479 260014 18572.009 0.006 -0.

015 =constant .CCI = price-MA 0.15*D Price = Closing price MA = Moving avg of the security D = Mean Deviation of moving avg .

43)_ (0.36) = 2414242.Gold: Analysis of 14 days From Ist DECEMBER TO 6th DECEMBER.015*D = ___(260014-18571.2757 GRAPHICAL REPRESENTATION OF GOLD GOLD S .015*18602. Price – MA CCI = _________________ 0.57 279.0354 = 865.

GOLD 18750 18700 18650 18600 18550 18500 18450 18400 18350 RETURNS Close(Rs) 1-2-3-5-6-7-8-9.1610.13.12.Jul.Dec DATE INTREPRETATION o The above graph shows the Analysis of Gold for 14 days.Jul. o Deviation is constant compared to moving avg.Jul.DecJul.15DecDecDecDecDecDecDec Jul. o The lowest price is DECEMBER 6th GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD .14. o On DECEMBER 1st the closing price high compared with other dates.

0046148 0.000814376 -0.004109219 0.006693067 -0.ANALYSIS AND INTERPRETATION OF GOLD.001788424 -0.000557165 -0.II COMMODITY DATE 17-Dec10 19-Dec10 20-Dec10 21-Dec10 22-Dec10 23-Dec10 24-Dec10 26-Dec10 27-Dec10 28-Dec10 29-Dec10 30-Dec10 31-Dec10 2-Jan-11 SYMBOL GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD total CLOSE(RS) 18495 18419 18504 18516 18452 18419 18404 18322 17948 17938 17929 18049 18025 17952 255372 RETURNS 0.001329714 -0.000501728 0.004455553 -0.00345647 -0.020412619 -0.004049931 .000648508 -0.000865848 -0.

21.26.8245 CCI = = = = GOLD returns 18600 18400 18200 18000 17800 17600 Series1 17.23. Price – MA _________________ 0.22.36 237131.27.29.31-219.30Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Jan date Interpretation: GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD .85714 _____________________ 0.1428 _________________ 279.28.0.24.015 * 18602.85714 sd 8 Gold : Analysis of 14 days From 17th December to 2nd January.0354 849.0061 avg 18240.20.015*D 255372 – 18240.

o Compared to above 1st & 2nd. o The highest Closing price is 21st & lowest is 29th December.o The above graph shows the Analysis of Gold for 14 days. o Based on same Deviation the CCI value was decreased. .

009949161 0.000643432 0.000160884 0.005163145 -0. DATE COMMODITY SYMBOL CLOSE(RS) RETURNS 6-Jan-11 7-Jan-11 9-Jan-11 10-Jan11 11-Jan11 12-Jan11 13-Jan11 14-Jan11 16-Jan11 17-Jan11 18-Jan11 19-Jan11 20-Jan11 21-Jan11 GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD total avg 18287 18283 18256 18293 18475 18647 18650 18662 18773 18759 18787 18884 18834 18843 260433 18602.000745752 0. .018660873 -0.005947916 -0.009309878 0.000218735 -0.ANALYSIS AND INTERPRETATION OF GOLD III.002026731 0.00583 8 Gold : Analysis of 14 days From 6TH aug to 21st January.000477859 Sd 0.001476782 0.002647744 0.35714 0.001492617 0.

8245742 = = = GOLD 19000 18800 18600 18400 18200 18000 17800 return Series1 6.19.0354 849.12.015 * 18602.18.20Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan date GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD .2111.36 237131.1429 ________________ 279.7.CCI = Price – MA _________________ 0.35714 _____________________ 0.13.015*D 260433-18602.16.14.17.9-10.

o Based on same Deviation the CCI value was decreased.001061402 0.00787152 -0.001000579 0.007589936 0.71429 -0.010188005 -0.001788721 0.00503 1 Gold : Analysis of 14 days From .26648E-05 0.003094676 0.007111483 sd 0. ANALYSIS AND INTERPRETATION OF GOLD IV.002252488 -0. COMMODITY DATE SYMBOL CLOSE(RS) RETURNS 23-Jan11 24-Jan11 25-Jan11 26-Jan11 27-Jan11 28-Jan11 29-Jan11 30-Jan11 31-Jan11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 5-Feb-11 GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD total avg 18823 18929 19078 18988 18989 19008 19042 19236 19090 19133 19057 19065 19124 19260 266822 19058.003972195 0.005631408 0. o Compared to above 2nd & 3rd.Interpretation: o The above graph shows the Analysis of Gold for 14 days. o The highest Closing price is 18TH January & lowest is 9th January.000419793 0.004717476 5.

.31Jan Jan AugJan Feb SepFeb Jan Jan Jan Jan Feb Feb Feb date GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD .1.015*18602.30.71429 _____________________ 0.27.6.015*D 266822-19058.28.23rd aug to 5th February.724.924 = = = GOLD 19300 19200 19100 19000 18900 18800 18700 18600 returns Series1 23.36 247763.25.2.28571 _________________ 279.26.4.0354 887. CCI = Price – MA _________________ 0.3.

003012831 0. o Compared to above 3rd & 4th.006769071 -0.006696776 0.015606053 0.002961654 0.001351913 -0.008230668 0. ANALYSIS AND INTERPRETATION OF GOLD V.005661861 -0.004113512 0.00713 8 . DATE COMMODITY SYMBOL CLOSE(RS) RETURNS 8-Feb-11 9-Feb-11 10-Feb11 13-Feb11 14-Feb11 15-Feb11 16-Feb11 17-Feb11 18-Feb11 20-Feb11 21-Feb11 22-Feb11 23-Feb11 24-Feb11 GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD total avg 19205 19075 18967 18963 19284 19232 19263 19246 19251 19206 19134 19303 19309 19258 268696 19192.002707487 sd 0.000210893 0.002855659 -0. o The highest Closing price is 7TH February & lowest is 23rd January. o Based on same Deviation the CCI value was increased.001711263 -0.57143 -0.Interpretation: o The above graph shows the Analysis of Gold for 14 days.014923799 -0.

4286 ________________ 279.36 = = = 249503.0354 894.1640738 .015 * 18062.57 _____________________ 0.015*D 268696-19192.Gold : Analysis of 14 days From 8TH February to 24th February. CCI = Price – MA _________________ 0.

Analysis of silver ANALYSIS AND INTERPRETATION OF SILVER I.GOLD 19400 19300 19200 19100 19000 18900 18800 18700 returns Series1 8.21.16. o The highest Closing price is 23rd February & lowest is 13th February.2313.17.15.22.004425085 0.18.003541913 -0. o Compared to above 4th & 5th.20.002283737 GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD .9-10. DATE 1-Dec10 2-Dec10 3-Dec10 5-Dec10 COMMODITY CLOSING(RS) returns SILVER SILVER SILVER SILVER 28926 28798 28900 28834 _ -0.14. o Based on same Deviation the CCI value was increased.24- Feb Feb Feb Feb Feb Feb Feb Feb Feb Feb Feb Feb Feb Feb date Interpretation: o The above graph shows the Analysis of Gold for 14 days.

00248782 -0.005755842 0.6-Dec10 7-Dec10 8-Dec10 9-Dec10 10Dec-10 12Dec-10 13Dec-10 14Dec-10 15Dec-10 16Dec-10 SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER total avg 28883 29014 28847 28941 29013 28930 29156 29234 29272 28902 405650 28975 0.003258571 0.00453554 -0.012640066 sd 0.00538 9 .001699383 0.001299856 -0.00781196 0.002860787 0.002675264 0.

185599 CCI = = = = .015 =constant Silver : Analysis From 1ST DECEMBER to 16th December.15*D Price = Closing price MA = Moving avg of the security D = Mean Deviation of moving avg .Commodity Channel Index analysis : CCI = Price-MA ___________________ 0.015*D (405650-28975) _____________________ 0.29 376675 _________________ 438.015 * 29227. Price – MA _________________ 0.4093 859.

o Deviation is constant compared to moving avg. o The lowest price is 2nd December.15Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec DATE Interpretation: o The above graph shows the Analysis of Silver 14 days.7.1610.9.13.SILVER 29400 29300 29200 29100 29000 28900 28800 28700 28600 28500 RETURNS Series1 1. SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER .14.5.2.6. o On 15th December the closing price high compared with other dates.3.12.8.

007438417 0.007680066 0. COMMODITY DATE 17Dec-10 19Dec-10 20Dec-10 21Dec-10 22Dec-10 23Dec-10 24Dec-10 26Dec-10 27Dec-10 28Dec-10 29Dec-10 30Dec-10 31Dec-10 2-Jan11 SYMBOL CLOSE(RS) RETURNS SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER total avg 28904 28689 28744 28906 29128 29218 29239 29260 28588 28395 28404 28764 28750 29088 404077 28862.000718219 -0.00308981 0.000316957 0.001917111 0.00048672 0.022966507 -0.012674271 -0.91994E-05 -0.011756522 Sd 0.006751084 0.64 6.005635959 0.ANALYSIS AND INTERPRETATION OF SILVER I.000718735 0.008897 .

015*D (404077-28862.24.015 * 29227. ANALYSIS AND INTERPRETATION OF SILVER III.2Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Jan Interpretation: o o o o The above graph shows the Analysis of Silver for 14 days.23.20.64) _____________________ 0.185599 = = = siver 29400 29200 29000 28800 28600 28400 28200 28000 27800 returns Series1 17.29 376675 _________________ 438. Compared to above 1st & 2nd.28.27.Silver : Analysis of 14 days From 17th December to 2nd January.26. CCI = Price – MA _________________ 0. The highest Closing price is 26th December & lowest is 28th December.3119.22.30.4093 859.21. SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER date . Based on same Deviation the CCI value was decreased.29.

DATE COMMODITY CLOSING(RS) returns 0.29 sd 0.00546617 3-Jan-11 SILVER 29247 2 4-Jan-11 SILVER 29085 -0.00165033 5-Jan-11 SILVER 29133 5 0.01065287 16-Jan-11 SILVER 29505 4 0.00553903 0.00085707 14-Jan-11 SILVER 29194 4 0.00367281 6-Jan-11 SILVER 29240 1 7-Jan-11 SILVER 29241 3.00725199 18-Jan-11 SILVER 29432 9 total 409182 avg 29227.41997E-05 0.29 379954.005058 Silver : Analysis of 14 days From 3rd January to 18th January.00233668 13-Jan-11 SILVER 29169 9 0.015 *29227.00130656 0.015*D 409182 .71 = .29 _____________________ 0.00480736 11-Jan-11 SILVER 28982 2 0.00481274 17-Jan-11 SILVER 29647 4 0.00410599 12-Jan-11 SILVER 29101 7 0.29227.00536917 9-Jan-11 SILVER 29084 3 10-Jan-11 SILVER 29122 0. CCI = Price – MA _________________ 0.

29000 28800 28600 o Based on same Deviation the CCI value was decreased.4093 866.5.9. RETURNS Series1 .14.4.16.6665396 SIVER Interpretation: 29600 29800 o Compared to above 2nd & 3rd.7.1711.6. o The highest Closing price is 17th January and lowest is 17th January.= = _________________ 438.12. 3.18Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER DATE 29400 29200 o The above graph shows the Analysis of Silver for 14 days.10.13.

001274412 23-Jan-11 SILVER 29033 -0.024630375 26-Jan-11 SILVER 30232 -0.015*D 366484 – 26177.001750041 27-Jan-11 SILVER 30344 0.07 .018048428 25-Jan-11 SILVER 30285 0.64 sd 0.ANALYSIS AND INTERPRETATION OF SILVER IV DATE COMMODITY CLOSING(RS) returns 19-Jan-11 SILVER 29405 -0.010177 Silver : Analysis of 14 days From 19th January to 3rd February.002998945 30-Jan-11 SILVER 30368 -0.003704684 28-Jan-11 SILVER 30435 0.004500275 2-Feb-11 SILVER 31056 0.015 * 24822.010303967 total 421829 avg 30130.000917369 20-Jan-11 SILVER 29033 -0.010016912 3-Feb-11 SILVER 31376 0.93 366413. Price – MA CCI = _________________ 0.00127279 24-Jan-11 SILVER 29557 0.017090358 1-Feb-11 SILVER 30748 -0.695 = _________________ 372.002201413 31-Jan-11 SILVER 30887 0.343 = 984.01265091 21-Jan-11 SILVER 29070 0.43 = _____________________ 0.

26.25. ANALYSIS AND INTERPRETATION OF SILVER V SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER .27.23.GOLD 32000 31500 31000 30500 30000 29500 29000 28500 28000 27500 returns Series1 19.31-1. o Compared to above 3rd & 4th.28.21.24.320.30Jan Jan Jan Jan Jan Jan Feb Jan Jan Jan Jan Jan Feb Feb DATE Aug- Interpretation: o The above graph shows the Analysis of Silver for 14 days.2. o The highest Closing price is 3rd February & lowest is 20th January. o Based on same Deviation the CCI value was increased.

42857 0.339 = = .DATE COMMODITY CLOSING(RS) returns 4-Feb-11 SILVER 31323 -0. CCI = Price – MA _________________ 0.00259 13-Feb-11 SILVER 31586 0.99687 17-Feb-11 SILVER 32269 7 18-Feb-11 SILVER 32256 -0.26607 3 Silver : Analysis of 14 days From 4th septo 21st sep.01196 14-Feb-11 SILVER 31964 7 0.00019 0.01127 0.42857 SD 0.00347 21-Feb-11 SILVER 31937 -0..00447 7-Feb-11 SILVER 31457 -0.00625 10-Feb-11 SILVER 31234 -0.0004 20-Feb-11 SILVER 32144 -0.5 _________________ 372.015*D = 444912 -31779.00169 6-Feb-11 SILVER 31463 0.00644 TOTAL 444912 AVG 31779.00450 15-Feb-11 SILVER 32108 5 16-Feb-11 SILVER 32344 0.343 933.00735 0.00174 8-Feb-11 SILVER 31512 8 9-Feb-11 SILVER 31315 -0.93 347522.015 * 24822.

2010. o The highest Closing price is & lowest .18.13.16.21Feb FebFebFebFebFebSep. o Compared to above 4th & 5th. SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER SILVER .gold returns 32500 32000 31500 31000 30500 CLOSING(RS) 4-6-7-8-9.14.17.FebFeb Feb dates Interpretation: o The above graph shows the Analysis of Silver for 14 days. o Based on same Deviation the CCI value was increased.15.Feb FebFebSep.

21 =1046.56(loss) RSI = 391.02 _____________ = _____________ 1046.37401 100 100 .43------------29.93 +361.Deviation =(0) 19058.35-------------19192.43*14 5480.56) .84 = 0.5 =391.56*14 14651.71-----------.35+590.43\1046.5 18602.21--------------Neg a tive 29.5-----590._______________ 1+( 391.Relative Strength Axe Formula: Average Positive Price change over period* periods RSI = ___________________________________________ Average Positive Price change over period* periods Gold Average 18572.86------------ --------------------------Posit ive 361.93 18240.43(gain) 456.456.36--------.

3248.4 *14 _____________ 3264.(-1354.57) = 3264.98 Positive Negative 1.4 = 5267.4 (Gain) (-1354.5) -------------26732.5 ----------.0 -------------26842.07) ._______________ 1.4/3264._______________ 1+(5267.93 -----------.07(Loss) RSI = 5267.0+2019.5)+ (-1909.07 *14 = 73743._______________ 1+(0.37401 = 100 – 77.4 -------------24822.Deviation 26177.07 -----------.23 Relative Strength Index Formula: RSI = Average Positive Price change over period* periods ___________________________________________ Average Positive Price change over period* periods Silver : Average 28070.6 = _____________ 45696.77 = 22.93 -----------.57) ----------3248.2019.100 100 .6137 100 = 100 .(-1909.43 ----------.37401) 100 = 100 .

_______________ 1+(1.100 = 100 .7313 .6131) 100 = 100 .2687 = 61._______________ 2.6131 = 100 – 38.

0 48.0 74.0 16.0 18.0 16.0 Valid Percent 26.0 10.0 64.0 100. 16% are Retired clients.0 18.0 22. 22% are Professional.0 GRAPH OCCU PATI 30 26 22 18 16 20 10 10 8 Percent 0 businessm en profession R etired house wife em polyee others OCCU PATI ANALYSIS From the above graph it has been observed that out of 50 clients 26% are Businessmen.0 10.0 8. . students.0 92.0 100. 10% are House wives.e.0 Cumulative Percent 26.0 8. 18% are Employees and 8% are others i.1) OCCUPATION Frequency Businessmen Profession Retired House wife Employees Others Total 13 11 8 5 9 4 50 Percent 26.0 100.0 22.

0 16. 6% clients are in the copper.0 16.0 10.0 26. 4%are in the Chana and 4% investors are investing in the Chilly commodities.0 10.0 Valid Cumulative Percent Percent 34.0 100.0 34.2) Which commodities do you preferred to invest in the commodities? PREFERRED COMMODITIES Frequency Valid Gold Silver Crudeoilo Copper Maize Chana Chilly Total 17 8 13 3 5 2 2 50 Percent 34.0 100.0 4.0 26.0 4.0 76. 26% are in the Crude oil.0 50.0 6.0 4.0 92.0 100.0 4. 10% are in the Maize.0 96.0 82. 16% are in the Silver.0 PRECOMMO 40 34 30 26 20 16 10 10 6 4 Gold Silver Crudeoilo Copper Maize Chana 4 Chilly Percent 0 PRECOMMO ANALYSIS From the above graph it has been observed that 34% investors are investing in the Gold.0 6. .

0 1 0 0 .0 8 0 .0 1 0 0 .0 2 0 . 48% clients for between 2 and 3 years and rest 20% investors are from the above 3 years investing in the commodities market.3) Since how long are you trade with the commodities? T R A D IN G F re q u e n cy P e rce n t V a lid le s s th a n 1 y e a r 16 3 2 .0 T o ta l 50 1 0 0 .0 a b o ve 3 ye a rs 10 2 0 .1 & 3 y e a r s 24 4 8 .0 4 8 .1 & years 3 above 3 years TR D G A IN ANALYSIS From the above graph it has been observed that 32% clients from less than one year.0 3 2 .0 C u m u la tiv e V a lid P e r c e n t P e r c e n t 3 2 .0 b e t. .0 TR D G A IN 50 48 40 30 32 20 20 Percent 10 0 less than 1 year bet.

0 62.0 100.0 100.4) Do you prefer to invest in the other commodities? Frequenc Percent y Valid Yes No Total 19 31 50 38.0 Valid Cumulativ Percent e Percent 38.0 100.0 38.0 62. .0 OTHECOMM 70 60 50 40 38 30 20 62 Percent 10 0 Yes no OTHECOMM ANALYSIS We have concluded that 38% investors are going to invest in the other commodities and remaining 62% people are not investing in the other commodities in the Hyderabad city.

0 38.0 16.0 WHICOMMO 70 60 50 40 30 20 62 22 16 Percent 10 0 Zinc Jeera not invested WHICOMMO ANALYSIS In the above analysis out of 19 people 11 (22%) investors are investing in the Zinc and rest 8 people (16%) investors are investing in the Jeera.0 62.0 100.0 Cumulative Percent 22.0 16.0 Valid Percent 22.0 100. .0 100. And remaining 31 clients (62%) clients are not investing in the other commodities.5) If Yes which Commodities? Frequency Percent Zinc Jeera Not invested Total 11 8 31 50 22.0 62.

0 Cumulativ e Percent 22.0 RISK 50 46 40 30 32 20 22 Percent 10 0 Low Risk Medium Risk High Risk RISK ANALYSIS The above graph indicates the Risk appetite for investing in the commodities market.0 32. Here out of 50 samples 22% investors seeking low risk.0 100. . 46% are medium risk and 32% investors have the high-risk period.0 32.0 68.0 46.0 46.0 Valid Percent 22.0 100.0 100.7) What would be your risk appetite for invested in the commodities? Frequency Percent Low Risk Medium Risk High Risk Total 11 23 16 50 22.

40% are medium return and rest 8% investors are invest for the purpose of low return.0 RETURN 60 50 52 40 40 30 20 Percent 10 8 0 Maximum Average Mimnimum RETURN ANALYSIS From the above graph 52% investors are investing in the commodities market to get a high return.0 92.0 40.0 8. .0 100.0 8.0 Valid Cumulative Percent Percent 52.0 52.0 40.8) Reasons and Ratings for the investment decisions (a) RETURN Frequency Percent Maximum Average Minimum Total 26 20 4 50 52.0 100.0 100.

0 100.0 46.0 100. out of 50 samples 44% investors’ intention is for the high transparency level when investing in the commodities market.0 10.0 90.0 TRANSPER 50 46 44 40 30 20 10 Percent 10 0 Maximum Average Minimum TRANSPER ANALYSIS From the above graph.0 Valid Maximum Average Minimum Total 22 23 5 50 44. 46% investors investing for medium transparency level and about 10% investors are investing for the minimum transparency level.0 100.0 10.0 44.(b) TRANSEPERANCY FREQUENCY Frequency Percent Valid Cumulative Percent Percent 44.0 46. .

0 44.0 100.0 6.0 100.0 6. out of 50 samples 50% people investing in the commodities for high liquidity purpose.(c) LIQUIDITY Frequency Maximum Average Minimum Total 25 22 3 50 Percent 50. .0 94.0 100.0 50.0 44. 44% are medium liquidity and rest 6% investors are investing in the commodities for minimum liquidity.0 Valid Cumulative Percent Percent 50.0 LIQUIDIT 60 50 50 44 40 30 20 Percent 10 6 maximum Average Minimum 0 LIQUIDIT ANALYSIS From the above graph.

0 44.0 100.(d) SAFETY Frequency Percent Valid Cumulative Percent Percent 44.0 100. .0 48.0 92.0 SAFETY 60 50 48 40 44 30 20 Percent 10 8 0 Maximum Average Minimum SAFETY ANALYSIS From the above graph out of 50 samples 44% investors are investing for the safety purpose.0 Maximum Average Minimum Total 22 24 4 50 44.0 8.0 100. 48% are medium safety and rest 8% are investing to get a minimum safety.0 8.0 48.

56% people are investing between 2 to 5 lakh annually and rest 32% investors are investing above 8 lakh annually in the commodities market and in the Hyderabad city.0 32.0 56.0 58.0 100.0 68.0 100.0 Cumulative Percent 10. .9) Annual investment in the commodities Frequency Less than 2 Lakh 2 to 5 Lakh 5 to 8Lakh Total 5 29 16 50 Percent 12.0 Valid Percent 10.0 INVESTME 60 56 50 40 30 32 20 Percent 10 12 0 Less than 2 Lakh 2 to 5 Lakh 5 to 8Lakh INVESTME ANALYSIS In the above graph out 50 investors 12% people are less than 2 lakh investing in the commodities market annually.0 100.0 32.

54% clients are expected to more researched information. 30% are expected Less brokerage and rest 16% are expected good service from the service provider.0 100.0 16.0 15 8 50 30.0 84.0 100.0 16.0 100.0 Cumulative Percent 54. .0 Valid Percent 54.0 SEREXPEC 60 54 50 40 30 30 20 16 Percent 10 0 Researched Informati Less Brokerage Good Service SEREXPEC ANALYSIS From the above graph represents that.0 30.10) Services excepted by the service provider Frequency Researche d Information Less Brokerage Good Service Total 27 Percent 54.

0 48.0 100.0 100.0 Valid Percent 24.0 50 100.0 18. about 48% investors are consult to the financial consultant before investment in the commodities.0 18.0 5 9 10.0 CONSULT 60 50 48 40 30 24 18 20 Percent 10 0 Rely on your ow n 10 Business Channels New s papers/ Magazin Financial Consultant CONSULT ANALYSIS The above graph represents.0 48.0 82.0 10. 10% investors investing on the basis of business channels and rest 18% people are consult news papers or magazines before investing in the commodities market. 24% are invested rely on their own decisions. CHAPTER-5 .0 Cumulative Percent 24.11) Consult before investment Frequency Rely on your own Financial Consultants Business Channels News papers/ Magazines Total 12 24 Percent 24.0 72.

2 to 5 lakh annually in the commodities.FINDINGS The findings from the survey analysis can be summarized as follows: • From the analysis. • • The 56% investors are investing Rs. • • 46% clients are interested to bear the medium risk in the Hyderabad city. 54% clients are expected . From the survey analysis. 48% trading with commodities since from the last 1 to 3 years.e. From the survey analysis. • 32% investors (clients) preferred to invest in the gold and 28% crude oil respectively. 50% for high liquidity and 48% investors are investing in commodities for their safety. 44% investors for transparency. out of 50 samples 26% are business people and investing in the commodities. • Most of the investors i. 52% investors are investing for high return.

• Majority of the respondents prefer to amounts invest ranging between 2 to 3 lakh with medium risk so grate potential market for medium returns in Hyderabad so company should concentrate on it. . It will be help full to create goodwill in minds of investors and attract new investors with less brokerage. • Transparency and returns is the basic parameters considered by investors while deleing with brokers so company maintain transference and possible as much as possible returns to satisfy investors. . And make awareness of the commodities so that it attracts investors.SUGGESTIONS • It is seen that most of the investors are businessmen and professionals. • Hyderabad investors are seeking to invest in gold and crude oil because of medium risk so company create awareness within grain merchants and other traders to invest in agri commodities. So company has to target these businessmen and professionals. • The company should provide update information of the commodity market.

• The preferences towards commodities in Hyderabad. • In the Hyderabad city the investors’ investment in the commodities is very low. but a brief knowledge and experience of that how to trade in the stock market. for gold and crude oil are high but for some other commodities it is too low. The research undertaken has brought into the light of the following conclusions.CONCLUSSION This project report entitled with investors preferences towards commodities market undergone on the stock broking concern is not merely a work of the project. .

com www. published by Vikas Publishing House Pvt. New Delhi.google. 1998. published by Tata McGraw Hill.com www. Khan & Jain Financial Management. I. 1995..ncdexindia. 1998 Prasanna Chandra  MAGAZINES Business World Business Today India Today NEWS PAPER  Business Line WEB SITES  www.BIBLIOGRAPHY BIBLIOGRAPHY: TEXT BOOKS  Financial management.com www.Pandey Financial Management theory & Practice.M. published by Tata McGraw Hill. Ltd.anandrathi.com .mcxindia.

Questionnaire Name: Address: Phone/Cell No: 1) Occupation: a) Businessmen d) House wife b) Profession e) Employee c) Retired f) others ______________________ ______________________ ______________________ 2) Which commodities do you prefer to invest in the commodities market? a) Gold d) Copper g) Chilly 3) Since how long are you trading with commodities? a) Less than One Year b) Between 1 and 3 Years c) Above 3 Years 4) Do you prefer to invest in other commodities? (a) Yes 5) If yes which commodities? a) Gold d) Copper g) Chilly b) Silver e) Maize h) Others (Specify) c) Crude oil f) Chana (b) No b) Silver e) Maize c) Crude oil f) Chana .

6) If no why? 7) What would be your Risk appetite for invest in the commodities? a) Low risk b) Medium Risk c) High Risk 8) Assign weightages to the parameters on which you base your investment decisions. Particulars Return Transparency Liquidity Safety Maximum Average Minimum 7) How much do you prefer to invest annually in the commodities? a) Less than 2 Lakh b) 2 to 5 Lakh c) 5 to 8 Lakh d) Above 8 Lakh 8) Which facilities do you expect from service provider regarding commodities trading? a) Researched information b) Less Brokerage c) Good service .

d) Others (specify) 9) Whom do you consult before investing in the commodities market? a) Rely on your own b) Financial consultants c) Business Channels d) News papers/magazines e) Others (Specify) 10) Your valuable suggestions THANK YOU .