Commodity futures’ trading has been first recorded in the 17th century in Japan. The futures Trading was has its routes in seasonal agricultural products so as to ensure their continuous supply all the year around. Japanese merchants used to store rice in the warehouses for their future use and used to sell receipts against such stored rice. These receipts were called as ‘rice tickets ‘which then eventually became the basis for their commercial currency. The rules which were established during this time for trading these rice tickets are similar to the rules set for American futures trading.
In the United States, the commodity futures trading first started in The middle of the 19th century with the help of the Chicago Board Of Trade set up in the year 1848. Gradually then about 10 commodity exchanges were set up with a wide variety of agricultural products being traded. Commodity derivative market first started in India in cotton in the 1875 and in the oilseeds in 1900 at Bombay. Forward trading in raw jute and jute goods started at Calcutta in the year 1912. But however, within few years of their establishment, the forwards trading in these commodities was banned in the year 1960.
Recently, in the year 2003, such ban on trading was lifted and the trading in commodity futures was started. Permission was given to establish online multi-commodity exchange in order to facilitate trading. The long period of prohibition of forward trading in major commodities like cotton and oilseeds complex has an enduring impact on the development of the commodity derivative markets in India and the futures market in commodities find themselves left far behind the derivative markets in the developed countries, which have been functioning uninterruptedly.
The Term Paper on Burma’s Peaceful Transition to a Democratic Future
Burma is an Asian country that attained its independence on 4th January 1948 and is bordered by China on the North and Thailand on the East. it was referred to as the union of Burma in 1948. On January 4th 1974 it changed its name to the union of Burma and then on 23rd September, 1888 it reverted to the union of Burma. In 1989, then it changed the name again to the union of Myanmar and this was ...
Thus, today the challenge before the commodity markets is to make up for the loss of growth and development during the three decades of government policies, which had the effect of restricting the growth of the derivative markets. Commodity Exchanges in India: Commodity exchanges are places which trade in particular commodities, neglecting the trade the trade of securities, stock index futures and options etc. Exchanges are the centralized places which provide a platform for both the buyers and the sellers to meet, set quality standards and establish the rules of businesses.
Commodity exchanges in India plays an important role as it offers a tool for efficient risk management and price transparency. In India, there are about 25 recognized regional exchanges (Annexure-1- List of all the Regional Commodity Exchanges), of which three are national level multi-commodity exchanges. These three national level multi-commodity exchanges are, National Commodity and Derivative Exchange Limited( NCDEX) Multi-Commodity Exchange Of India( MCX)
National Multi-Commodity Exchange Of India Limited ( NMCEIL) All the above exchanges have been set up under the overall control of Forward Market Commission of Government of India. National Commodity & Derivative Exchange Limited (NCDEX) National Commodity & Derivative Exchange Limited (NCDEX) located in Mumbai is a public limited company incorporated on April 23, 2003 under the Companies Act, 1956 and had commenced its operations on December 15, 2003. This is the only commodity exchange in the country promoted by the national level institutions.
It is promoted by ICICI Bank Limited, Life Insurance Corporation of India ( LIC) , National Bank for Agriculture and Rural Development ( NABARD) and National stock exchange ( NSE) . It is a professionally manages online multi- commodity exchange. NCDEX is regulated by Forward Market Commission and is subject to various law of land like the Companies Act, Stamp Act, Contracts Act, Forward Commission (Regulation) Act and various other legislations. Multi Commodity Exchange of India Limited (MCX) Multi Commodity Exchange is headquartered in Mumbai and is an independent,
The Essay on Foreign Exchange Service of Bank Asia Limited
1. Introduction The banking sector in Bangladesh comprises of four categories of scheduled banks. These are, nationalized commercial banks (NCBs), government owned development finance institutions (DFIs), private commercial banks (PCBs) and foreign commercial banks (FCBs). Performance of these banking sectors under CAMEL framework, which involves analysis, and evaluation of the five crucial ...
de-metalized exchange with the permanent recognition from Government of India. Key Shareholders of MCX are Financial Technologies (India) Ltd. , State Bank of India, Union Bank of India, Corporation Bank, Bank of India and Canar Bank. MCX facilitates online trading, clearing and settlement operations for commodity futures market across the country. MCX started offering trade in November 2003 and has built strategic alliances with Bombay Bullion Association, Bombay Metal Exchange, Solvent Extractors’ Association of India, Pulse Importers Association and Shetkari Sanghatana.
National Multi-Commodity Exchange of India Limited (NMCEIL) National Multi-Commodity Exchange of India Limited (NMCEIL) is the first de-mutualized, Electronic Multi-commodity Exchange in India. On 25th July, 2001, it was granted approval by the government to organize trading in the edible oil complex. It has been started operations from November 26 2002. It has been supported by Central Warehousing Corporation Ltd. Gujarat State Agricultural Marketing Board and Neptune Overseas limited. It has got its recognition in October 2002.
Commodities traded over the exchanges: Commodities that can be traded over the exchanges are as follows: Bullion Gold and Silver Oil & Oilseeds Castor Seeds, Soya Seeds, Castor Oil, Refined Soya Oil, Soya meal, Crude Palm Oil, Groundnut Oil, Mustard Seed, Cotton Seed Oil Cake, Cottonseed. Spices Pepper, Red Chilly, Jeera, Turmeric, Cardamom Metals Steel Long, Steel Flat, Copper, Nickel, Zinc, Tin, Steel, Aluminum Fiber Kapas, Long Staple Cotton, Medium Staple Cotton Pulses Chana. Urad, Yellow Peas. Grains
Rice, Basmati Rice, Wheat, Maize, Sarbati Rice, Jeera Energy Crude Oil, Natural Gas, Brent Crude Others Rubber, Guar Seed, Guar Gum, Cashew, Cashew Kernel, Sugar, Coffee, Silk, Sugar. 2. 1 INTRODUCTION OF SEBI DEFINITION OF STOCK EXCHANGE: “Stock exchange means the body of individuals whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities. ” It is an association of member brokers for the purpose of self-regulation and protecting the interests of its members.
The Business plan on Securities Exchange Board of India
... known as Securities Exchange Board of India (SEBI) 2. Aims and objectives of SEBI The main objectives of SEBI are: (1) Regulation of Stock Exchanges: The ... 7. RECENT DEVELOPMENTS IN THE CAPITAL MARKETS DIVISION Securities Contracts (Regulation) Amendment Act, 2007 The Securities Contracts Regulation Act, 1956 has been amended to include securitisation ...
It can operate only if it is recognized by the Government under the securities contracts (regulation) Act, 1956. The recognition is granted under section 3 of the Act by the central government, Ministry of Finance. ‘Recognised Stock Exchange’ means a stock exchange, which is for the time being recognised by the Central Government under Section 4 of the SC(R) A. As per Section 2(h), the term “securities” include- (I) Shares, scrip’s, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate, (ii) Derivative,
(iii) Units or any other instrument issued by any collective investment scheme to the investors in such schemes, (iv) Security receipts as defined in clause of section 2 of the Securization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI) (v) Units or any other such instrument issued to the investors under any mutual fund scheme, (vi) any certificate or instrument issued to an investor by any issuer being a special purpose distinct entity which possesses any debt or receivable, including mortgage debt, assigned to such entity, and acknowledging beneficial interest of such investor in such debt or receivable, including mortgage debt, as the case maybe. (vii) Government securities, (viii) Such other instruments as may be declared by the Central Government to be securities, and (ix) Rights or interests in securities. BYLAWS: Besides the above act, the securities contracts (regulation) rules were also made in 1957 to regulate certain matters of trading on the stock exchanges. There are also bylaws of the exchanges, which are concerned with the following subjects.
Opening/closing of the stock exchanges, timing of trading, regulation of bank transfers, regulation of carryover business, control of the settlement and other activities of the stock exchange, fixation of margins, fixation of market prices or making up prices, regulation of taravani business (jobbing), etc. , regulation of brokers trading, brokerage charges, trading rules on the exchange, arbitration and settlement of disputes, settlement and clearing of the trading etc. 2. 2 REGULATION OF STOCK EXCHANGES: The securities contracts (regulation) act is the basis for operations of the stock exchanges in India. No exchange can operate legally without the government permission or recognition.
The Term Paper on The Securities And Exchange Commission
... The Securities and Exchange Commission In 1934 the Securities Exchange Act created the SEC (Securities and Exchange Commission) in response to the stock market ... Legal Information Institute, Chapter 2 C-Public Utilities Holding Companies (web) Merrill Corporation, Trust Indenture Act-General Rules ... the Rules and Regulations (web files, rags/R 260-index. htm) Kenneth S. Davis, FDR: The New Deal Years ...
Stock exchanges are given monopoly in certain areas under section 19 of the above Act to ensure that the control and regulation are facilitated. Recognition can be granted to a stock exchange provided certain conditions are satisfied and the necessary information is supplied to the government. Recognition can also be withdrawn, if necessary. Where there are no stock exchanges, the government can license some of the brokers to perform the functions of a stock exchange in its absence. Why do we need a regulatory body for investor protection in India? India is an ‘informational’ weak market. Boosting capital market demands restoring the confidence of lay investors who have been beaten down by repeated scams.
Progressively softening interest rates and an underperforming economy have eroded investment options, and require enhanced investing skills. SECURITIES CONTRACTS (REGULATION) ACT, 1956 The Securities Contracts (Regulation) Act, 1956 [SC(R)A] was enacted to prevent undesirable transactions in securities by regulating the business of dealing therein and by providing for certain other matters connected therewith. This is the principal Act, which governs the trading of securities in India Listing of Securities Where securities are listed on the application of any person in any recognized stock exchange, such person shall comply with the conditions of the listing agreement with that stock exchange (Section 21).
Where a recognised stock exchange acting in pursuance of any power given to it by its bye-laws, refuses to list the securities of any company, the company shall be entitled to be furnished with reasons for such refusal and the company may appeal to Securities Appellate Tribunal (SAT) against such refusal. Delisting of Securities A recognised stock exchange may delist the securities of any listed companies on such grounds as are prescribed under the Act. Before delisting any company from its exchange, the recognized stock exchange has to give the concerned company a reasonable opportunity of being heard and has to record the reasons for delisting that concerned company. The concerned company or any aggrieved investor may appeal to SAT against such delisting. (Section 21A).
The Essay on Stock Exchange Market Shares Buy Stockbroker
A stock exchange is a place where you can buy and sell shares. We call people who buy or sell small numbers of shares small investors. Organizations, who buy or sell large numbers of shares, are institutional investors. A stock exchange is the place where companies can raise money to expand their businesses. Companies raise this money by selling shares to investors. At the same time the stock ...
SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI):
SEBI was set up as an autonomous regulatory authority by the Government of India in 1988 ” to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto. ” It is empowered by two acts namely the SEBI Act, 1992 and the securities contract (regulation) Act, 1956 to perform the function of protecting investor’s rights and regulating the capital markets. Objectives of SEBI: As an important entity in the market it works with following objectives: 1 It tries to develop the securities market. 2. Promotes Investors Interest. 3. Makes rules and regulations for the securities market. Functions of SEBI: 1.
Regulates Capital Market 2. Checks Trading of securities. 3. Checks the malpractices in securities market. 4. It enhances investor’s knowledge on market by providing education. 5. It regulates the stockbrokers and sub-brokers. 6. To promote research and investigation. 7. Investor education and training of the Intermediaries. 8. Inspection and enquiries. BOMBAY STOCK EXCHANGE This stock exchange, Mumbai, popularly known as “BSE” was established in 1875 as “The Native share and stock brokers association”, as a voluntary non-profit making association. It has evolved over the years into its present status as the premiere stock exchange in the country.
It may be noted that the stock exchanges the oldest one in Asia, even older than the Tokyo Stock exchange which was founded in 1878. The exchange, while providing an efficient and transparent market for trading in securities, upholds the interests of the investors and ensures redressed of their grievances, whether against the companies or its own member brokers. It also strives to educate and enlighten the investors by making available necessary informative inputs and conducting investor education programs. A governing board comprising of 9 elected directors, 2 SEBI nominees, 7 public representatives and an executive director is the apex body, which decides the policies and regulates the affairs of the exchange. BSE INDICES:
The Essay on The Stock Market is a Example of Perfect Competition
The stock market is perfectly competitive because there are a very large number of groups in the market. The stock market, as we know it, is a global community that consists of four different groups: public corporations; market makers; buyers; and sellers. Public corporations are businesses that offer shares, or ownership, to anyone willing to pay money for them. Buyers are investors who want to ...
In order to enable the market participants, analysts etc. , to track the various ups and downs in the Indian stock market, the Exchange has introduced in 1986 an equity stock index called BSE-SENSEX that subsequently became the barometer of the moments of the share prices in the Indian stock market. It is a “Market capitalization-weighted” index of 30 component stocks representing a sample of large, well-established and leading companies. The base year of Sensex is 1978-79. The Sensex is widely reported in both domestic and international markets through print as well as electronic media. Sensex is calculated using a market capitalization weighted method.
As per this methodology, the level of the index reflects the total market value of all 30-component stocks from different industries related to particular base period. The total market value of a company is determined by multiplying the price of its stock by the number of shares outstanding. Statisticians call an index of a set of combined variables (such as price and number of shares) a composite Index. An Indexed number is used to represent the results of this calculation in order to make the value easier to work with and track over a time. It is much easier to graph a chart based on Indexed values than one based on actual values world over majority of the well-known Indices are constructed using “Market capitalization weighted method “.
In practice, the daily calculation of SENSEX is done by dividing the aggregate market value of the 30 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the SENSEX. The Divisor keeps the Index comparable over a period of time and if the reference point for the entire Index maintenance adjustments. SENSEX is widely used to describe the mood in the Indian Stock markets. Base year average is changed as per the formula. NATIONAL STOCK EXCHANGEThe NSE was incorporated in Nov 1992 with an equity capital of Rs. 25 crs. The International securities consultancy (ISC) of Hong Kong has helped in setting up NSE. ISC has prepared the detailed business plans and installation of hardware and software systems.
The promotions for NSE were financial institutions, insurances companies, banks and SEBI capital market ltd, Infrastructure leasing and financial services ltd and stock holding corporation ltd. It has been set up to strengthen the move towards professionalization of the capital market as well as provide nationwide securities trading facilities to investors. NSE is a national market for shares PSU bonds, debentures and government securities since infrastructure and trading facilities are provided. NSE – NIFTY: The NSE on April 22, 1996 launched a new equity Index. The NSE-50. The new Index which replaces the existing NSE-100 Index is expected to serve as an appropriate Index for the new segment of futures and options. “Nifty “means National Index for Fifty Stocks.
The NSE-50 comprises 50 companies that represent 20 broad Industry groups with an aggregate market capitalization of around Rs. 1, 70,000 crs. All companies included in the Index have a market capitalization in excess of Rs 500 crs each and should have traded for 85% of trading days at an impact cost of less than 1. 5%. The base period for the index is the close of prices on Nov 3, 1995, which makes one year of completion of operation of NSE’s capital market segment. The base value of the Index has been set at 1000. NSE – MIDCAP INDEX: The NSE midcap Index or the Junior Nifty comprises 50 stocks that represents 21 board Industry groups and will provide proper representation of the midcap segment of the Indian capital Market.
The base period for the index is Nov 4, 1996, which signifies two years for completion of operations of the capital market segment of the operations. The base value of the Index has been set at 1000. At present, there are 24 stock exchanges recognized under the securities contract (regulation) Act, 1956. They are List of Stock Exchanges recognized under the securities contract (regulation) Act, 1956 NAME OF THE STOCK EXCHANGE YEAR Bombay stock exchange, Ahmadabad share and stock brokers association Calcutta stock exchange association Ltd, Delhi stock exchange association Ltd, Madras stock exchange association Ltd, Indoor stock brokers association, Bangalore stock exchange, Hyderabad stock exchange,
Cochin stock exchange, Pune stock exchange Ltd, U. P stock exchange association Ltd, Ludhiana stock exchange association Ltd, Jaipur stock exchange Ltd, Gauhathi stock exchange Ltd, Mangalore stock exchange Ltd, Maghad stock exchange Ltd, Patna, Bhubaneswar stock exchange association Ltd, Over the counter exchange of India, Bombay, Saurasthra Kutch stock exchange Ltd, Vadodara stock exchange Ltd, Coimbatore stock exchange Ltd, The Meerut stock exchange Ltd, 1National stock exchange Ltd, Integrated stock exchange, 1875 1957 1957 1957 1957 1958 1963 1943 1978 1982 1982 1983 1983-84 1984 1985 1986 1989 1989 1990 1991 1991 1991 1991,1999 Commodity futures Contract:
A Commodity futures contract is a contractual agreement between two parties to buy or sell a specified quantity and quality of commodity at a certain time in future at a certain price agreed at the time of entering into the contract on the commodity futures exchange. Commodity futures are beneficial to a large section of the society, be it farmer, businessman, industrialist, importer, exporter, consumer etc. The benefits that an investor could reap by investing in the commodity futures are as follows: Diversification: The returns from commodities market are free from the direct influence of the equity and the debt market, which means that they are capable of being used as effective hedging instruments providing better diversification.
Less Manipulation: Commodities markets, as they are governed by international price movements are less prone to rigging or price manipulations by individuals. But since, Indian markets are less matured to be escaped from the manipulations. In India, in absence of liquidity in the commodity markets, the sole producers of the commodity try to manipulate the commodity markets. High Leverage: The margins in the commodity futures market are less than the F&O section of the equity market. For an importer or an exporter, the commodity futures can help in the following ways: Hedge against the price fluctuations: Wide fluctuations in the prices of the import or export products can directly affect the bottom-line as the price at which the products are imported or exported are decided beforehand.
Commodity futures help to procure or to sell the commodities at a price at which the exporter or the importer wishes to sell his produce. For the producer of the commodity, the commodity futures are beneficial in the following way: Lock-in the price for the produce: For a farmer, there is every chance that the price of his produce may come down drastically at the time of the harvest. By taking positions in the commodity futures, the farmer can effectively lock-in the price at which he wishes to sell his produce. Assured Demand: Any glut in the market can make the producer to wait unendingly for the buyer. Selling commodity futures contract can give the producer an assured demand at the time of the harvest.
Increasing the holding power: The producer can store the underlying commodity in the exchange approved warehouses and sell in the futures to realize the future value of the commodity. For the large scale consumer, commodity futures are beneficial in the following way: Control the cost: For an industrialist, the raw material cost dictates the final price of his produce. Any sudden rise or fall in the price of the raw materials can compel the industrialist to pass the hike to the customers and make his products unattractive in the market. Thus, buying the commodity futures, he can fix the price of the raw material. Ensure continuous supply: Any shortfall in the supply of the raw materials can stop the production and make the producer to default his sale obligations.
The producer can avoid this risk of default by buying the commodity futures contract, in order to have an assured supply of a fixed quantity of materials at a pre-decided price at the appointed time. Chapter-3 COMPANY PROFILE Company profile Share Khan Limited VISION To be the best retail brokering brand in the retail business of stock marketing. Mission To educated and empower the individual investor to make better investment decision through the quality advice and superior services. The strong market was found to be souring to new heights day by day, and then coming down all of a sudden in such scenario the investors are pretty much confused as to where to put their money. The menace movement market creates a lot of confusion among the investors and many investors end up losing their hard earned money.
In such a scenario many broking firms have emerged that claim to guide the investors about their stocks. These broking firms have their own research department which continuously monitors the stocks and updating the investors. Once of the largest broking firm of the country is Share Khan limited. Share Khan limited is one of the leading retail stock broking houses of SSKI group which is running successful since 1922 in the country. It stretches to the Mumbai based SSKI group which has over 8 decades of experience in the stock broking business. The association with SSKI concluded after recent changes in the share holding pattern of the company.
Share khan offers its customers a wide range of equity related services including trade execution on BSE NSE Derivatives, depository services, online trading, investment advice etc. The firm has been the pioneer in online trading in India. Its online training and investment site www. sharekhan. com was launched on February 2000 and is the second most visited broking site in India. It has the largest number of share shops in the country. The company website gives access to superior content and transaction facility to retail customer across the country. Known for its Jargon free investor friendly language and high quality research the site the site has a large number of customers.
The content rich and research oriented portal has stood out among its contemporizes because of its straight fast dedication t o offer its customers the best of breed technology and superior market information. The objective has been to let customers make informed decision and to simplify the process of investing stocks. Name of the Company: Share khan ltd. Year of Establishment: 1925 Headquarter: Share khan SSKI A-206 Phoenix House Mills Compound Lower Parel Mumbai Maharashtra, INDIA-400013 Nature of business: Service provider Services: Equity Broking, PMS, Financial Product Distribution Number of Employees: Over 3500 Customers: More than 9. 5 million Website: www. sharekhan. com Slogan: Your Guide to the Financial Jungle THE SERVICE DELIVERY MODEL BLENDING: TRADITION AND TECHNOLOGY:
The service delivery model of Share khan Limited is a combination of tradition and technology. The various services on offer are Share Shops Online Trading – a choice of three trading interfaces Trade Tiger for Active Traders Web based Classic interface for investors Web based applet –fast trade for investors Dial-n-trade Sharekhan services. Equities and derivatives. Portfolio management and structured products. Research IPO. Mutual funds. Commodities. Depository services. HIREARCHY IN SHAREKHAN. Achievements of company A rated among the top 20 wired companies along with reliance, Infosys, etc by’ business today’, Jan 2004 edition. Awarded top domestic brokerage house four times by euro money and Asia money.
Pioneers of online trading in India amongst the top 3 online trading websites from India. Most preferred financial destination amongst online broking customers. Winners of ‘best financial website ‘award. India’s most preferred brokers within 5years. Swot analysis of sharekhan Strengths It’s a pioneer in online trading with turnover of 400crs and more than 3000 peoples working in the organization. Employees are highly empowered and strong communication network. Number 1 registrar and transfer agent and dealer of investment products in India. Good co-operation between employees. Weakness Localized presence due to insufficient investment for country wide expansion.
High brokerage charges but now they have overcome this by a new prepaid scheme in which brokerage in reduced to half. High employee turnover Lack of awareness among customers because of non-aggressive promotional strategies (print media,newspapers,etc) Opportunities With the booming capital market it can successfully launch new services and raise its client’s base. Marketing at rural and semi-urban areas. Increasing usage of online trading may boost a whole new breed of investors for trading in securities. As interest on fixed deposits with post office and banks are all time low, more and more small investors are entering into stock market. Threats
Lack of sufficient branch- offices for speedy delivery of services. Increasing number of competitors. Constant pressure to be cost competitive to meet customer’s expectations. Aggressive promotional strategies by close competitors may hamper sharekhan’s acceptance by new clients. Major competitors for sharekhan. Kotak securities Indian bulls ICICI direct. com Religare Motilal oswal Bajaj capital Reliance money HDFC securities, India infoline. Tied Up Banks HDFC bank Citibank Federal bank Oriental bank of commerce IDBI bank Union bank Indusind bank Bank of India Deutscho bank Axis bank Yes bank. CHAPTER-4 NATURE OF GOLD ETFs NATURE OF GOLD ETFs
ETFs are just what their name implies: baskets of securities that are traded, like individual stocks, on an exchange. Unlike regular open-end mutual funds, ETF scan be bought and sold throughout the trading day like any stock. Most ETFs charge lower annual expenses than index mutual funds. However, as with stocks, one must pay a brokerage to buy and sell ETF units, which can be a significant drawback for those who trade frequently or invest regular sums of money. Exchange Traded Funds (ETFs) are open ended mutual funds that are passively managed and most of them seek to mirror the return of an index, a commodity or a basket of assets. ETFs are listed and traded on stock exchanges like stocks.
They enable investors to gain broad exposure to indices or defined underlying asset (commodity) with relative case, on a real-time basis, and at a lower cost than many other forms of investing. Gold ETFs provided investors a means of participating in the gold bullion market without the necessity of taking physical delivery of gold, and to buy and sell that participation through the trading of a security on stock exchange. Gold ETF would be a passive investment; so, when gold prices move up, the ETF appreciates and when gold prices move down, the ETF loses value. Gold ETF tracks the performance of Gold Bullion. Gold ETFs provide returns that, before expenses, closely correspond to the returns provided by physical Gold. Each unit approximately equal to the price of 1 gram of Gold.
But, there are Gold ETFs which also provide a unit which is approximately equal to the price of ? gram of Gold. They first came into existence in the USA in 1993. It took several years for them to attract public interest. But once they did, the volumes took off with an average. Over the last few years more than $120 billion (as on June 2002) is Invested in about 230 ETFs. About 60% of trading volumes on the American Stock Exchange are from ETFs. The most popular ETFs are QQQs (Cubes) based on the Nasdaq-100 Index, SPDRs (Spiders) based on the S&P 500 Index, I SHARES based on MSCI Indices and TRAHK (Tracks) based on the Hang Seng Index. The average daily trading volume in QQQ is around 89 million shares.
Their passive nature is a necessity: the funds rely on an arbitrage mechanism to keep the prices at which they trade roughly in line with the net asset values of their underlying portfolios. For the mechanism to work, potential arbitragers’ need to have full, timely knowledge of a fund’s holdings. History Deregulation of Gold in India In India goldsmiths are usually men, and are referred to by a variety of names depending on the region. In the Vedic period (Second Millennium BC), gold smiths had a much higher standing in society than most other artisans, probably because they worked with a precious metal. The gold smiths enjoy defrayal patronage.
Historical evidence suggests that Indian jewelers had early mastery of the various skills required to make fine jewellery, such as mixing alloys, moulding, setting stones, inlay work, relief, drawing gold and silver into fine wires, plating and gilding. The duties of the goldsmith have been defined in an ancient social code, but are observed more by breach than by adherence. There is hardly any village or town, even in the remote corners of the country, where there is no goldsmith. SOME BASIC TERMS INVOLVED IN GOLD ETFs NAV: stands for net asset value declared everyday by the asset management company (AMC), which manages the ETFS. It is calculated by dividing the total value of the portfolio less any liabilities, by the no of fund ETFS outstanding. BID: the price at which investors want to buy gold ETFS. ASK: the price at which the investors wants to sell gold etfs.
CREATION: the procedure of creating fresh gold ETF whenever there is demand ETF demand from authorized participants (AP’S).
REDEMPTION: the procedure of buying back gold ETF whenever there is supply ETF from AP’S. TRACKING ERROE: this is the difference in the live quote of domestic price with that ETF (generally it ranges from is o. o5%-0. 07%).
Gold ETFs list – Gold ETF funds list in India In India people have traditionally invested in gold by buying jewellery and gold bars. Over the years the various avenues for people to invest their money has grown manifold. In India we have around 44 mutual fund houses. Out of them those 14 have started Gold ETFs.
The following is the complete list of Gold ETFs in India (Updated on 1st October).
Scheme Name Symbol Axis Gold ETF AXISGOLD Goldman Sachs Gold Exchange Traded Scheme GOLDBEES UTI GOLD Exchange Traded Fund GOLDSHARE HDFC Gold Exchange Traded Fund HDFCMFGETF ICICI Prudential Gold Exchange Traded Fund IPGETF Kotak Gold Exchange Traded Fund KOTAKGOLD Quantum Gold Fund (an ETF) QGOLDHALF Reliance Gold Exchange Traded Fund RELGOLD Religare Gold Exchange Traded Fund RELIGAREGO SBI Gold Exchange Traded Scheme SBIGETS Birla Sun Life Gold ETF BSLGOLDETF IDBI Gold Exchange Traded Fund IDBIGOLD Motilal Oswal MOST Shares Gold ETF MGOLD Canar Robeco Gold Exchange Traded Fund
CRMFGETF TYPES OF GOLD ETFS 1. Gold ETFs That Contain Gold Products The nice thing about gold ETFs is that you can invest in gold without actually buying gold doubloons and storing them in the attic safe. Gold ETFs like IAU and GLD, track the performance of gold by including gold products like bullions in a trust that is used to cover the liabilities of the fund on an as-needed basis. 2. Gold ETFs That Contain Gold Futures Some types of gold ETFs are constructed differently to track the performance of gold. Gold ETF like DGL consists of derivatives like futures, forwards, and options in order to emulate a gold index. This same construction str
