puja and trushna (1)

8/12/2019 Puja and Trushna (1)

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GTUs Enrollment No: 00000000000000

A

Project report on

At

Submitted By :

PUJA CHAURASIYA (Roll No: A1205)

TRUSHNA NAYAK (Roll No:A1215)

MBA Programme 2012 2014 (Semester II)

I n parti al ful fi ll ment of the requi rements for Summer I nternship Programme for the award ofthe degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted to:

Gujarat Technological University (GTU), Ahmedabad

Investor awareness towards commodity market


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I n v e s t o r a w a r e n e s s t o w a r d s c o m m o

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Declaration

The project report entitled Investor awareness towards commodity market has been

submitted to Gujarat Technological University, Ahmedabad in partial fulfillment for the award

of degree of Master of Business Administration. We are undersigned hereby declare that this

report has been completed by us under the guidance of Mr.Arpit Dave (Angel

Broking ) .Professor Mr. Nishad Darji (Faculty Member, Shayona Institute of Business

Management, Ahmedabad)

The report is entirely the result of my own efforts and has not been submitted either in part orwhole to any other institute or university for any degree.

Name of the Student with Signature: PUJA CHAURASIYA

TRUSHNA NAYAK

GTUs Enrollment No.:

Date: 25 th July, 2013

Place: Ahmedabad


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Certificate

This is to certify that he project titled Investor awareness towards commodity market is a

work done by (Puja Chaurasiya & TrushnaNayak) student of Shayona Institute of Business

Management (SIBM). The student has successfully completed this project under my guidance.

We are sure that the experience gained during the project work will enable (him/her) to take

similar challenging projects in future.

(Prof. Nishad Darji)

Date:25 th July, 2013

Place: Ahmedabad

Dr. B. K. Nirmal

(HOD MBA Programme)


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Preface

As a part of MBA, we learn about Angel broking company for practical training and also studied

studied on the working of its different services and prepare report on particular topic. We felt

that this unit is being run superbly by excellent management team, and employees co-operation.

It is universal truth that every work has 2 aspects. In education, we can apply this approach.in

equation are thing is theretical aspects. Management student must have practical

aspects.management students have a some practical knowledge about business. Our practical

knowledge helps us to face a problem not theretical.

It is my pleasure to present work after we had finished my project at angel broking this project

has expanded my horizon of knowledge in practical as well as theoretical which are vital for any

student in management level studies. After completion of this project we enhance our knowledge

and come to know about the services or products.


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Acknowledgement

It is almost inevitable to incur indebtedness to all who generously helped by sharing their

invaluable time and rich experience with me, without which this project would have never been

accomplished.

No task can be achieved alone, particularly while attempting to finish a project of such

magnitude. It took many special people to facilitate it and support it. Hence, We would like to

acknowledge all of their valuable support and convey my humble gratitude to them. We would

like to thank Prof . M r. Ni shad Darj i of Shayona Institute of Business Management (SIBM)

for their guidance throughout the preparation of the project and for their valued suggestion.

We express our sincere thanks to the management of Angel broking for giving us this golden

opportunity to work as a trainee in their company. The guidance and support provided by

the company have really made the training a learning experience for us. This short period was

full of rich experience, which will definitely help me in my future career.

First of all, We would like thanking M r.Arpit Dave ( Angel B roki ng / C.G. Road HO ) and

other our team leader Malav Shah & Urvish Bhavsar ,staff member for their valuable guidance

and encouragement.


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EXECUTIVE SUMMARY:

One of the interesting developments in financial market over the last 15 to 20 years has been the

growing popularity of derivatives. In many situations, both hedgers and speculators find it moreattractive to trade a derivative on an asset, commodity than to trade asset and commodity itself.

Some commodity derivatives are traded on exchanges.

In this report We have included history of commodity market. Than We have included

commodity market in India. And after that We have discussed the mechanism of trading in

commodity market in India.

In this report we have taken a first look at forward, futures and options contract and other risk

management instruments. Than after We have discuss the main components of future commodity

trading like contract size, what actual margin is and delivery system etc. There are mainly three

types of traders: hedgers, speculators and arbitrageurs.

In the next section, We discuss about the two major commodity exchanges in India that is MCX

AND NCDEX. How they are worked for developing this commodity market in India. Then after

We have discussed about the present scenario of commodity market in India.

In the next We have tried to analyze the trading pattern and investment pattern of commodity

traders . This we have done through the help of QUESTIONER, which contains 13 questions.

On the basis of different charts prepared, We have at the end given the research findings and

conclusion. And on the basis of our findings We have given suggestion and recommendation


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Table of Contents:

Sr.no Particulars P.n.

Ch.1 Introduction to research 81.1 Introduction to the Angel/commodity 9

1.2 Research problem 12

1.3 Scope of research 12

1.4 Research objective 13

1.5 Research design 13

1.5.1 Methods of data collection 13

1.5.2 Sample design 14

1.5.2.1 Sampling methods 14

1.5.2.2 Sample unit 15

1.5.2.3 Sample size 15

1.5.2.4 Target area 15

1.5.3 Tools & techniques 15

1.6 Data analysis 15

1.7 Limitation 15

Ch-2 Introduction to Angel 16

2.1 Industry scenario 22

2.2 Organization details 47

2.2.1 Hierarchy of key persons 47

2.2.2 Product lines 48

2.2.3 Swot of the industry 50

Ch-3 Literature review 52


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Ch-4 Data analysis & interpretation 56

Ch-5 5.1 Findings & Conclusion 72

5.2 Suggestion &Recommendation 74

5.3 Learning from the project 76

Ch-6 Bibliography 76

Ch-7 Appendices 78


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CHAPTER-1

INTRODUCTION TORESEARCH


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Introduction to the commodity

A commodity may be defined as an article, a product or material that is bought and sold. It can

be classified as every kind of movable property, except Actionable Claims, Money & Securities.Commodities actually offer immense potential to become a separate asset class for market-savvy

investors, arbitrageurs and speculators. Retail investors, who claim to understand the equity

markets, may find commodities an unfathomable market. But commodities are easy to

understand as far as fundamentals of demand and supply are concerned. Retail investors should

understand the risks and advantages of trading in commodities futures before taking a leap.

Historically, pricing in commodities futures has been less volatile compared with equity and

bonds, thus providing an efficient portfolio diversification option.

Commodity Market

Commodity markets are markets where raw or primary products are exchanged. These raw

commodities are traded on regulated commodities exchanges, in which they are bought and sold

in standardized contracts

Commodity market is an important constituent of the financial markets of any country. It is themarket where a wide range of products, viz., precious metals, base metals, crude oil, energy and

soft commodities like palm oil, coffee etc. are traded. It is important to develop a vibrant, active

and liquid commodity market. This would help investors hedge their commodity risk, take

speculative positions in commodities and exploit arbitrage opportunities in the market.

Commodity market is extremely liquid, risky and complex by nature. Futures market is

centralized market place for buyers and sellers from around the world who meet and enter into

commodity futures contracts. Pricing is mostly is based on an open cry system, or bids and offersthat can be matched electronically. The commodity contract will state the price that will be paid

and the date of delivery. Almost all futures contracts end without the actual physical delivery of

commodity.


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Indian Commodity Market

The vast geographical extent of India and her huge population is aptly complemented by the size

of her market. The broadest classification of the Indian Market can be made in terms of thecommodity market and the bond market. The commodity market in India comprises of all

palpable markets that we come across in our daily lives. Such markets are social institutions that

facilitate exchange of goods for money. The cost of goods is estimated in terms of domestic

currency. India Commodity Market can be subdivided into the following two categories:

1. Wholesale Market

2. Retail Market

CommodityMarket

WholesaleMarket

RetailMarket


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The size of the commodities markets in India is also quite significant. Of the country's

GDP of Rs 13, 20,730 crore (Rs 13,207.3 billion), commodities related (and dependent)

industries constitute about 58 per cent. Currently, the various commodities across the

country clock an annual turnover of Rs 1, 40,000 crore (Rs 1,400 billion). With the

introduction of futures trading, the size of the commodities market grows many folds here

on.

1.1 Research problem

The first and foremost of the analysis is the limited number of respondents because of

limited respondents 100, the complete scenario of the current broking industry is not

available.

A study & analysis with investor awareness towards commodity market for angel

broking.

1.3Scope of research

This study is l imited to only Ahmedabad City the study is carried out to know

the awareness level of investors towards Commodity market.

This study also helps to know about trading mechanism of Commodity Market &

the future trading level.

Here our scope of research will be how we can increase the awareness of

investors in commodity market.


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1.4 Research objective

To know the perception of investors towards commodity future market.

To find the awareness level of commodity market in Ahmedabad city.

To understand the commodity market and its working mechanism.

To know which commodity they prefer to invest.

1.5 Research Design

1.5.1 Methods of data collection

There are two types of data collection method.

(a) Primary data

(b) Secondary data

(a) Primary data:

Primary data is used to collect initial material during the research process. Primary Data

is the data that the researcher collects himself using methods such as Surveys, Direct

Observation, and Interviews. Primary Sources of information allow the learner to access

original and unedited information.


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In this Project Report we collected Data by using Survey Method. The Primary Data has

been collected by filling Questionnaires. The Questionnaires contain both Open Ended &

Close Ended Questions.

It is obtained from the residents of Ahmedabad.

(b) Secondary data:

Secondary Sources are edited Primary Sources. Secondary Data is the data that were

collected by someone for purpose other than solving the problem at hand. They are one ofthe cheapest & easiest means of access to information. Secondary Data Analysis is

commonly known as Second hand Analysis.

The biggest advantage of using secondary data is economics. Someone else has already

collected the data, so the researcher does not have to devote money, time, energy, and

other resources to this phase of research.

1.5.2 Sample design

1.5.2.1 SAMPLING TYPE

In this project convenient sampling method is used for the selection ofcustomer.


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1.5.2.2 SAMPLING UNIT

Customers of Angel Broking limited.

1.5.2.3 SAMPLE SIZE: 100

1.5.2.4 TARGET AREA : Ahmedabad city

1.5.3 Tools/techniques used for data analysis: Tables and graphs

1.6 LIMITATIONS

This survey was restricted to Ahmedabad city.

The sample size for the survey of people was limited to 100 respondents, which mightnot be

representing the whole country.

The results are totally derived from the respondents answers. There might be a

difference between the actual and projected results.

Research also depends on surveyors bias & his/her ability to analyze the data &

drawconclusion.

The time duration to carry out the survey of all the areas of Ahmedabad was very short.


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CHAPTER-2

INTRODUCTION TOANGEL


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Introduction

NAME OF THE COMPANY

ANGEL BROKING

LOGO OF THE COMPANY

Starting right makes a big difference

Angel Broking's tryst with excellence in customer relations began more than 20 years ago.

Today, Angel has emerged as a premium Indian stock-broking and wealth management house,

with an absolute focus on retail business, and a commitment to provide "Real Value for Money"

to all its clients.

Mr. Dinesh Thakkars f oresight and entrepreneurial skills made angel broking what it is today.

With just a team of three, he started business as a sub broker in a tiny office way back in 1987.

And since then, he hasnt looked back. Angel broking has emerged as one o f the largest broking

House in the country. The members of angel broking are proud to receive the major volume


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Driver trophy by bse for seven consecutive years (2005 -2011).

Angel have also bagged the coveted Bloomberg UTV financial leadership awards for best

Contribution in investors education and category enhancement of the year 2011 and dun and

Bread street equity broking awards 2011 for best retail broking house and fastest growing

Equity broking house.

Angel broking are a complete broking house,offering a plethora of retail-centric

services.Constantly generating value added service with out passing the cost burden onto our

clients.Better understanfding of clients need is our top priority.

Our e-broking facility is one such effort in this direction, which gives their clients a platform to

Access state of the art trading on a click of a button .


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Business

Equity Trading

Commodities

Portfolio Management Services

Mutual Funds

Life Insurance

Personal Loans

IPO

Depository Services

Investment Advisory

AngelGroup

Angel Broking Ltd.

Angel Commodities Broking Ltd.

Angel Securities Ltd

Angels membership - BSE, NSE, NCDEX AND MCX

Registered as a DP with CDSL.

Nation wide network

20 regional hubs

144 branch offices


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8500+ registered sub brokers/ authorized persons

Over 7.76+ lakh customers

4200+employees

Highest number of sub brokers on NSE and BSE.

SERVICES OF ANGEL :

Stock broking:

1. Cash Market

2. Derivatives Trading

3. Margin Trading

4. Internet Trading

Commodities Broking:

1. Commodities Futures

2. Financing Against Commodities

Depository Service:

A depository is like a bank wherein the deposits are securities in electronic form.


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1. NSDL (National Securities Depository Limited)

2. CDSL (Central Depository Services Limited)

IPO Subscription Services

Mutual Fund Products

Portfolio management

Insurance Services

Qualitative Research in Stock & Commodities

FUTURE SERVICES:

1. Private Banking Sector

2. Forex Market

3. Commodities Demat Service


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4. Product Enhancement in commodity market.

2.1 industry scenario

October,2011

Angel Broking bagged the Dun & Bradstreet Equity Broking Awards 2011 for 'Best Retail

Broking House' and 'Fastest Growing Equity Broking House' (Large Firms) at Dun & Bradstreet

Equity Broking Awards 2011.

March,2011

Angel Broking was awarded with 'Best in Contribution Investor Education & Category

Enhancement of the year' and 'Best Commodity Research of the year'

November,2010

Angel Broking bags the coveted Major Volume Driver Award by BSE for 2009 -10

October,2009


May,2009

Angel Broking wins two prestigious awards for 'Broking House with Largest Distribution

Network' and 'Best Retail Broking House' at Dun & Bradstreet Equity Broking Awards
http://www.angelbroking.com/Major-Volume-Driver-Award-2010.aspxhttp://www.angelbroking.com/Major-Volume-Driver-Award-2010.aspxhttp://www.angelbroking.com/Major-Volume-Driver-Award-2010.aspxhttp://www.angelbroking.com/Major-Volume-Driver-Award-2010.aspx


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August,2008

Angel Broking crosses 5,00,000 mark in unique trading accounts

November,2008

Angel Broking wins the esteemed Major Volume Driver Award by BSE for 2007 -2008

November,2007

Angel Broking augments its business with introduction of Insurance Distribution in alliance with

Birla Sun Life

November,2007

Angel Broking wins the honoured Major Volume Driver Award by BSE for 2006 -2007

March,2007

Angel Broking crosses the benchmark of 2,00,000 unique trading accounts

December,2006

Angel Broking expands its network by creating 2500 business associates

October,2006


September,2006


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Angel Broking commences distribution of Mutual Funds and IPOs

July,2006

Angel Broking launches Portfolio Management Services (PMS)

March,2006

Angel Broking on expansion drive crosses 1,00,000 mark in unique trading accounts

October,2005

Angel Broking wins the prestigious Major Volume Driver Award by BSE for 2004 -2005

September,2004

Angel Broking launches Online Trading Platform facilitating easy and hassle-free trading for its

customers

April,2004

Angel Broking expands its basket of services by establishing the Commodity Broking division

April,2003

Angel Broking publishes its first research report

November,2002

Angel Broking successfully conducts its first Investor Seminar to increase investor awareness


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March,2002

Angel Broking develops web-enabled back office software to maximize its operational efficiency

November,1998

Angel Capital and Debt Market Ltd. incorporated as a member of NSE

December,1997

Angel Broking Ltd incorporated as a wealth management, retail and corporate broking firm


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WHY COMMODITIES MARKET?

India has very large agriculture production in number of agri-commodities, which needs

use of futures and derivatives as price-risk management system. Fundamentally price you

pay for goods and services depend greatly on how well business handle risk. By using

effectively futures and derivatives, businesses can minimize risks, thus lowering cost of

doing business.

Commodity players use it as a hedge mechanism as well as a means of making money.

For e.g. in the bullion markets, players hedge their risks by using futures Euro-Dollar

fluctuations and the international prices affecting it. For an agricultural country like India,

with plethora of mandis, trading in over 100 crops, the issues in price dissemination,

standards, certification and warehousing are bound to occur. Commodity Market will

serve as a suitable alternative to tackle all these problems efficiently.


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Commodities

Gold, Gold HNI, Gold M, I-Gold, Silver, Silver HNI, Silver M

Castor Oil, Castor Seeds, Coconut Cake, Coconut Oil, Cottonseed,rude Palm Oil,

Groundnut Oil,KapasiaKhalli (Cottonseed Oilcake), Mustard /Rapeseed Oil,MustardSeed (Sirsa), RBD Palmolein, Refined Soy Oil, Refined Sunflower Oil, Sesame Seed,

Soymeal, Soy Seeds

Cardamom, Jeera, Pepper, Red Chilli


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Aluminium, Copper, Lead, Nickel, Sponge Iron, Steel Flat, SteelLong (Bhavnagar),Steel

Long (Gobindgarh), Tin, Zinc

Cotton Long Staple , Cotton Medium Staple, Cotton Short Staple, Cotton Yarn, Kapasii

Chana, Masur, Tur, Urad, Yellow Peas,


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Basmati Rice, Maize, Rice, Sarbati Rice, Wheat

Brent Crude Oil, Crude Oil, Furnace Oil Middle East Sour Crude Oil

Arecanut, Cashew Kernel, Rubber


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High Density Polyethylene (HDPE), Polypropylene (PP), PVC

Guar Seed, Guar gum, Gurchaku, Mentha Oil, Potato, Sugar M-30,


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COMMODITY FUTURES

Commodity futures are simply the standard futures contracts traded through exchange. These

contracts have their respective commodity as underlying asset and derive the dynamics from it.

Such contracts allow the participant to buy and sell certain commodity at a certain price for

future delivery. Futures trading is a natural outgrowth of the problem of maintaining a year-

round supply of seasonal products like agriculture crops. The best thing about a commodity

futures contract is that it I generally leveraged giving opportunity to all types of investors to

participate. Characteristically, such a contract has an expiry and delivery attached with it.

WHY TRADE IN COMMODITIES?

WHY TRADE INCOMMODITIES

Big market-diverse

opportunities

Get to the sore

Hugepotential

Exploitablefundamental


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Big market-diverse opportunities

India, a country with a population of over one billion, has an economy based on

agriculture, precious metals and base metals.

Thus, trading in commodities provides lucrative market opportunities for a wider

section of participants of diverse interests like investors, arbitragers, hedgers, traders,

manufacturers, planters, exporters and importers.

Get to the sore

Commodity trading has been a breakthrough in expanding the investment from

investing in a metal company to trading in metal itself.

Huge potential

Commodity exchanges see a tremendous daily turnover of more than Rs.15,000 cores.

This gives a lunge potential to market participant to make profits.

Exploitable fundamental

The fundamental for commodity trading is simple price is a function of demand and

supply so is hedging, by taking appropriate contract. This makes things really easy to

understand and exploit


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ADVANTAGE OF FUTURES TRADING

Futures trading remove the hassles and costs of settlement and storage for traders whodo not

want custody.Though, the most lucrative element of futures trading is that it allows investors

toparticipate and trade at nominal costs at a much lesser amount:

No longer need to put the whole amount for trading; only the margin is required.

No sales tax is applicable if the trade is required off. Sales tax is applicable only if

a trade results in delivery.

Traders can short sell. If a trader buys an equivalent contract back before the contractexpires, he

will be able to profit from a falling price. This is difficult in spot marketers because it requires

the seller to borrow the commodity. It is next to impossible for retailinvestors in case of

something like gold.All participants trade exactly the same notional right i.e. those defined on

the standardcontract, so the market grows deeper and more liquid in the standard futures contract

than inspot bullion where different qualities of bullion exit, each of which has different

prices.Greater liquidity provides a reliable real-time price something which is absolutely

notavailable in the OTC bullion market.

WHAT IS A COMMODITY FUTURE EXCHANGE?

Exchange is an association of members, which provides all organizational support forcarrying

out futures trading in a formal environment. These exchanges are managed by theBoard of

Directors, which is composed primarily of the members of the association. Thereare also

representatives of the government and public nominated by the Forward Markets Commission.

The majority of members of the Board have been chosen from among the members of the

Association who have trading and business interest in the exchange. Thechief executive officer

and his team in day-to-day administration assist the Board. There aredifferent classes of


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members who capitalize the exchange by way of participation in the formof equity, admission

fee, security deposits, registration fee etc.

a. Ordinary Members:

They are the promoters who have the right to have own accounttransactions without having the

right to execute transactions in the trading ring. They have toplace orders with trading members

or others who have the right to trade in the exchange.

b. Trading Members:

These members execute buy and sell orders in the trading ring of theexchange on their account,

on account of ordinary members and other clients.

c. Trading-cum-Clearing Members:

They have the right to trade and also to participate inclearing and settlement in respect of

transactions carried out on their account and on accountof their clients.

d. Institutional Clearing Members:

They have the right to participate in clearing andsettlement on behalf of other members but do

not have the trading rights.

e. Designated Clearing Bank:

It provides banking facilities in respect of pay-in, payout andother monetary settlements.The

composition of the members in an exchange however varies. In so me exchanges thereare

exclusive clearing members, broker members and registered non -members in addition tothe

above category of members.


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STRUCTURE OF COMMODITY MARKET


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Multi Commodity Exchange

(www.mcxindia.com)

This exchange was originally promoted by Financial Technologies Limited, a software company

in the capital markets space. Subsequently other institutional shareholders have been added on.

MCX is popular for trading in metals and energy contracts.

CommoditiesMCX

Warehouses

ClearingBank

QualityCertification

Agencies

Traders(speculators)arbitrageurs/

clientProducers(Farmers/Co

-operatives/In

stitutional)

Hedger(Exporters /

MillersIndustry)

Consumers(Retail/Instit

utional)

Transporters/Supportagencies
http://www.mcxindia.com/http://www.mcxindia.com/


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Recent Developments in India

The advent of economic liberalization helped the cause of laying emphasis on the importance

of commodity trading. By the beginning of 2002, there were about 20 commodity exchanges in

India, trading in 42 commodities, with a few commodities being traded internationally.

Commodities futures contracts and the exchanges they trade in are governed by the Forward

Contracts (Regulation) Act, 1952. The regulator is the Forward Markets Commission (FMC), a

division of the Ministry of Consumer Affairs, Food and Public Distribution.

In 2002, the Government of India allowed the re-introduction of commodity futures in India.

Together with this, three screen based,nation-wide multi-commodity exchanges were also

permitted to be set up with the approval of the Forward Markets Commission. These are:

1. National Commodity & Derivative Exchange

(www.ncdex.com)

This exchange was originally promoted by ICICI Bank, National Stock Exchange (NSE),

National Bank for Agriculture and Rural Development (NABARD) and Life Insurance

Corporation of India (LIC). Subsequently other institutional shareholders have been added on.

NCDEX is popular for trading in agricultural commodities.
http://www.kotakcommodities.com/http://www.ncdex.com/http://www.ncdex.com/http://www.kotakcommodities.com/


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National Commodity & Derivatives Exchange Limited (NCDEX) is a professionally online multi

commodity exchange promoted by ICICI Bank Limited (ICICI Bank), Life Insurance Corporation of

India (LIC), National Bank for Agriculture and Rural Development (NABARD) and National Stock

Exchange of India Limited (NSE). Punjab National Bank (PNB), CRISIL Limited (formerly the

Credit Rating Information Services of India Limited), Indian Farmers Fertilizer Cooperative Limited

(IFFCO) and Canara Bank by subscribing to the equity shares have joined the initial promoters as

shareholders of the Exchange. NCDEX is the only commodity exchange in the country promoted bynational level institutions. This unique parentage enables it to offer a bouquet of benefits, which are

currently in short supply in the commodity markets. The institutional promoters of NCDEX are

prominent players in their respective fields and bring with them institutional building experience,

trust, nationwide reach, technology and risk management skills. NCDEX is a public limited company

incorporated on April 23, 2003 under the Companies Act, 1956. It obtained its Certificate for

Commencement of Business on May 9, 2003. It has commenced its operations on December 15,

2003.


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2. Multi Commodity Exchange

(www.mcxindia.com)

This exchange was originally promoted by Financial Technologies Limited, a software company

in the capital markets space. Subsequently other institutional shareholders have been added on.

MCX is popular for trading in metals and energy contracts.

3. National Multi Commodity Exchange of India

(www.nmce.com)

This exchange was originally promoted by Kailash Gupta, an Ahmedabad based trader, andCentral Warehousing Corporation (CWC). Subsequently other institutional shareholders have

been added on. NMCE is popular for trading in spices and plantation crops, especially from

Kerala, a southern state of India.
http://www.mcxindia.com/http://www.nmce.com/http://www.nmce.com/http://www.mcxindia.com/


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Commodities traded in Commodity Exchanges :

Large numbers of commodity are traded on commodity exchanges in around the world. The

commodities are classified on the basis of their use and consumption. Further classification is

based on the characteristics of the commodity. Some of the commodities traded on various

futures exchanges are as follows:

Foodstuff Industrial Metals Precious Metal Energy

Coffee Copper Gold Crude Oil

Sugar Lead Platinum Natural Gas

Cocoa Zinc Palladium

Maize Tin Silver

Roughrice Aluminium

Soybean Nickel

Wheat Recycled

Sunflower Oil

Barley

Orange Juice
http://www.kotakcommodities.com/copper-trading-in-india.htmlhttp://www.kotakcommodities.com/gold-trading-in-india.htmlhttp://www.kotakcommodities.com/crude-oil-trading-in-india.htmlhttp://www.kotakcommodities.com/sugar-trading-in-india.htmlhttp://www.kotakcommodities.com/silver-trading-in-india.htmlhttp://www.kotakcommodities.com/aluminium-trading-in-india.htmlhttp://www.kotakcommodities.com/soybean-trading-in-india.htmlhttp://www.kotakcommodities.com/soybean-trading-in-india.htmlhttp://www.kotakcommodities.com/aluminium-trading-in-india.htmlhttp://www.kotakcommodities.com/silver-trading-in-india.htmlhttp://www.kotakcommodities.com/sugar-trading-in-india.htmlhttp://www.kotakcommodities.com/crude-oil-trading-in-india.htmlhttp://www.kotakcommodities.com/gold-trading-in-india.htmlhttp://www.kotakcommodities.com/copper-trading-in-india.html


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Major Players In Commodity market

Hedgers:

A Hedger can be Farmers, manufacturers, importers and exporter. A hedger buys or sells in the

futures market to secure the future price of a commodity intended to be sold at a later date in the

cash market. This helps protect against price risks.

MajorPlayers In

Commoditymarket

Hedger

SpeculatorArbitrage


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The holders of the long position in futures contracts (buyers of the commodity), are trying to

secure as low a price as possible. The short holders of the contract (sellers of the commodity)

will want to secure as high a price as possible. The commodity contract, however, provides a

definite price certainty for both parties, which reduces the risks associated with price volatility.

By means of futures contracts, Hedging can also be used as a means to lock in an acceptable

price margin between the cost of the raw material and the retail cost of the final product sold.

Speculator:

Other commodity market participants, however, do not aim to minimize risk but rather to

benefit from the inherently risky nature of the commodity market. These are thespeculators, and they aim to profit from the very price change that hedgers are protecting

themselves against. A hedger would want to minimize their risk no matter what they're

investing in, while speculators want to increase their risk and therefore maximize their

profits. In the commodity market, a speculator buying a contract low in order to sell high

in the future would most likely be buying that contract from a hedger selling a contract

low in anticipation of declining prices in the future.

Unlike the hedger, the speculator does not actually seek to own the commodity in

question. Rather, he or she will enter the market seeking profits by off setting rising and

declining prices through the buying and selling of contracts.

In a fast-paced market into which information is continuously being fed, speculators and

hedgers bounce off of--and benefit from--each other. The closer it gets to the time of the

contract's expiration, the more solid the information entering the market will be regarding

the commodity in question. Thus, all can expect a more accurate reflection of supply and

demand and the corresponding price. Regulatory Bodies the United States' futures market

is regulated by the Commodity Futures Trading Commission, CFTC, and an independent

agency of the U.S. government. The market is also subject to regulation by the National


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Futures Association, NFA, a self-regulatory body authorized by the U.S. Congress and

subject to CFTC supervision.

A Commodity broker and/or firm must be registered with the CFTC in order to issue or

buy or sell futures contracts. Futures brokers must also be registered with the NFA and

the CFTC in order to conduct business. The CFTC has the power to seek criminal

prosecution through the Department of Justice in cases of illegal activity, while violations

against the NFA's business ethics and code of conduct can permanently bar a company or

a person from dealing on the futures exchange. It is imperative for investors wanting to

enter the futures market to understand these regulations and make sure that the brokers,

traders or companies acting on their behalf are licensed by the CFTC.

Arbitrage:

Arbitrage refers to the opportunity of taking advantage between the price difference

between two different markets for that same stock or commodity.

In simple terms one can understand by an example of a commodity selling in one market

at price x and the same commodity selling in another market at price x + y. Now this y, isthe difference between the two markets is the arbitrage available to the trader. The trade

is carried simultaneously at both the markets so theoretically there is no risk. (This

arbitrage should not be confused with the word arbitration, as arbitration is referred to

solving of dispute between two or more parties.)

The person who conducts and takes advantage of arbitrage in stocks, commodities,

interest rate bonds, derivative products, forex is know as an arbitrageur.

An arbitrage opportunity exists between different markets because there are different

kind of players in the market, some might be speculators, others jobbers, some market-

markets, and some might be arbitrageurs. In India there are a good amount of Arbitrage

opportunities between NCDEX, MCX in commodities.


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Gold

(Indian commodity market)

Gold is a unique asset based on few basic characteristics. First, it is primarily a monetary

asset, and partly a commodity. As much as two thirds of golds total accumulated

holdings relate to store of value considerations. Holdings in this category include the

central bank reserves, private investments, and high-cartages jewelers bought primarily in

developing countries as a vehicle for savings. Thus, gold is primarily a monetary asset.

Less than ona e third of golds total accumulated holdings can be considered a

commodity, the jewelers bought in Western markets for adornment, and gold used in

industry.

The distinction between gold and commodities is important. Gold has maintained its

value in after-inflation terms over the long run, while commodities have declined.

Some analysts like to think of gold as a currency without a country. It is an

internationally recognized asset that is not dependent upon any governments promise to

pay. This is an important feature when comparing gold to conventional diversifiers like

T-bills or bonds, which unlike gold, do have counter-party risk.


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Derivatives

The term "Derivative" indicates that it has no independent value, i.e. its value is entirely

"derived". A derivative is a financial instrument, which derives its value from some other

financial price. This other financial price is called underlying . The most commonunderlying

assets include stocks, bonds, commodities, currencies, livestock, interest rates andmarket

indexes.A wheat farmer may wish to contract to sell his harvest at a future date to eliminatethe

risk of a change in prices by that date. The price for such a contract would obviouslydepend upon

the current spot price of wheat. Such a transaction could take place on a wheatforward market.

Here, the wheat forward is the derivative and wheat on the spot market isthe underlying. The

terms derivative contract, derivative product, or derivative areused interchangeably.

There are two broad types of derivatives:

F

Financial derivatives : - Here the underlying includes treasuries, bonds, stocks,

stock index,foreign exchange etc.

Commodity derivatives : Here the underlying is a commodity such as wheat,

cotton, peppers, turmeric, corn, soybeans, rice crude oil etc.


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2.2 organization details

Organizational Structurehierarchy of key persons

Regional Officer

Branch manager

IT

(Information

Technology)

HR

(HumanResourc)

BackOffice

RMS

(Risk

ManagementServices)

B2B B2C

Relationshipmanager

Businessdevelopment

manager

Unitmana e

Relationshipexcutive


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2.2.1 Product lines

Equity

Investing in shares or stock market is inarguably the best route to long-term wealth

accumulation. However, it can also be a very risky proposition due to high risk-return trade-off

prevalent in the stock market. Hence, it is more appropriate to take help of an experienced and

trustworthy expert who will guide you as to when, where and how to invest.

Derivatives

The derivative segment is a highly lucrative market that gives investors an opportunity to earn

superlative profits (or losses) by paying a nominal amount of margin. Over past few years,

Future & Options segment has emerged as a popular medium for trading in financial markets.

Future contracts are available on Equities, Indices, Currency and Commodities.

Commodities

Commodities Derivative market has emerged as a new avenue for investors to create wealth.

Today, Commodities have evolved as the next best option after stocks and bonds for diversifying

the portfolio. Based on the fundamentals of demand and supply, Commodities form a separate

asset class offering investors, arbitrageurs and speculators immense potential to earn returns.

Life Insurance

Ensure your familys wel l-being by securing their future with a life insurance policy. No

financial planning is complete without life insurance. Angel offers an array of life insurance

products like Term Plans, Endowment Plans, Money back Plans, Children Life Insurance Plans

and ULIP Plans to meet your individual insurance requirements.


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Mutual Funds

Investing in a Mutual fund is an excellent way of diversifying risk as well as portfolio. Angel presents its Mutual fund services that strive to meet all your mutual fund investment needs. We

have a wide spectrum of investment schemes from all top mutual fund houses.

Angel also provides recommendations based on in-depth research, mutual fund performance and

mutual fund ratings to help meet your investment goals.

Depository Services

Enjoy the dual benefits of trading and depository services under one roof and experience

efficient, risk-free and prompt depository service. Angel is registered as a Depository Participant

with CDSL. We are also a member of the Bombay Stock Exchange (BSE), National Stock

Exchange (NSE) and the two leading Commodity Exchanges in the country NCDEX & MCX.

PMS

Portfolio Management Service is a highly customized service offering a range of investment

options best suited in the current market scenario. Angel offers professional Portfolio

Management Service (PMS) to HNIs who seek customized solutions to realize their investment

goals. Our Portfolio Managers are equipped to design an investment portfolio across various

investment avenues like Equities, Fixed Deposits, Bonds etc. in sync with your unique needs.

Currency Trading

The global increase in trade and foreign investments has led to inter-connection of many national

economies. This and the resulting fluctuations in exchange rates, has created a huge international

market for Forex rendering investors another exciting avenue for trading. The Forex market


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offers unmatched potential for profitable trading in any market condition or any stage of the

business cycle.

Investment Advisory

Even a seasoned investor knows that effective timing of markets is not possible. Therefore,

professional and expert advice is essential to generate superior returns from the stock market.

At Angel, we offer you investment advisory services with ternary objective of superior returns,

risk minimization and portfolio diversification. Supported by a highly specialized and dedicated

Research team, Angel follows a client-centric approach to offer customized solutions.

2.2.2 SWOT of the company

STRENGTHS

Experienced player in the market

Broad product range

Wide range of distribution network Marketing team is proficient enough to cover various segments

Excellent image in the market

Customer Orientation

Efficient and Skilled Manpower

Excellent image in the market

Investment Advice

WEAKNESSES

Angel still could not meet the fuller customer satisfaction

There is a stiff competition from the banks


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After sale services

Software problems

OPPORTUNITIES

Ever increasing market in investment field

Emerging new technology

Unfilled needs of the customer

Education level

Untapped market

THREATS

Price war

Substitute products

Computer literacy in the prospect investors

New competitors

Technology based business


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CHAPTER-3

LITERATURE

REVIEW


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Literature Review

Investors consider factor like global economy, availability of commodity and others

things during investing in commodity and earn money by doing technical and

fundamental analysis from their brokers.

Media and friends are powerful communicating networks for expansion. It has been that,

respondents are investing their income in diversified portfolio and less risky assets. There

has been seen that coffee, wheat and cotton are more dealing commodity and investor

believe that commodity market have good opportunist market in future and most of

investor invest when there is favorable price in market. The commodity futures markets

are experiencing a good growth in the recent past.

After almost two years that commodity trading is finding favor with Indian investors and

is been seen as a separate asset class with good growth opportunities. For diversification

of portfolio beyond shares, fixed deposits and mutual funds, commodity trading offers a

good option for long-term investors and arbitrageurs and speculators. And, now, withdaily global volumes in commodity trading touching three times that of equities, trading

in commodities cannot be ignored by Indian investors.

Online commodity exchanges need to revamp certain laws governing futures in

commodities to make the markets more attractive. The national multi-commodity

exchanges have united proposed to the government that in view of the growth of the

commodities market, foreign institutional investors, too, should be given the go-ahead to

invest in commodity futures in India. ( Satishkumar, 2003)


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In his study identified that a perception lies with majority of investors that future trading

fits and it is not used for other purpose like hedging. The nature of the derivatives

instruments are to reduce the risk involved in trading but in real time investors are not

taking derivatives trading for reducing their risk involved in trading and profit making is

considered to be an important factor for the them.

On the other side a number of reforms and initiatives are still needed in promoting India

as a major futures trading hub in tune to the status of being amongst the top five

producers of most of the commodities. (R.T.NirmalKumar, 2006)

Has using data's from 12 gold-mining firms from the period 1985 to 1998 with an

intention to study the effect of gold price movement toward gold mining company stock

price in Australia, A single and multi-factor market models has used to determine the

stock price movement, gold price movement and the regression relationship among them.

At the end of this research, the authors suggest that the changes in gold price have

significance effect towards stock price for gold mining company. Where 1% change in

gold price will cause 0.76% change in gold mining company stock price. (Twite, 2002)

AkthamMaghyereh and Ahmad Al-Kandari, (2007) has employed the stock market data

from Kuwait, Bahrain, Saudi Arabia and Oman on period from 1 January 1996 to 31

December 2003. In order to investigate the relationship between oil price and stock

market in Gulf Cooperation Council Country (GCC). Several test ranging from rank unit

root test, rank test for cointegration, and score statistics for nonlinear cointegration has been done to identify the relationship between oil price and stock market indices. The

results get from traditional, linear cointegration analysis suggest that there is no linear

long run relationship between oil price and stock market. While the results gets from rank

tests suggest that a non linearcointegration relationship between GCC stock market and

oil price is discovered. Last but not least, for score statistics for nonlinear cointegration, it


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also shows that the relationship between oil price and GCC stock market is consider as

non linearcointegration. (AkthamMaghyereh and Ahmad Al-Kandari, 2007)

Has conducted a study to determine the relationship between crude oil price, stock

returns, output and interest rate in Turkey. They have used series of data like crude oil

whole sale price index, stock indices from Istanbul Stock exchange, 12 month interest

rate, and industrial production index as a tool in calculating stock return. The

methodologies employed are Variance Decomposition and Impulse Response technique.

For variance decomposition test, the results suggest that movement in oil price has the

largest effect towards stock return, follow by interest rate and industrial product. For

impulse response test, the results suggest that in initial stage, a change in oil price does

not show a significance impact for stock return in turkey, but it is significance after the

initial stage. As a conclusion, the finding from this research indicates that change in oil

price does not significantly affect stock return in Turkey. (Sari and Soytas, 2006)

Has conduct a study examining the relationships between oil prices and Gulf CooperationCouncil Country (GCC) countries' stock market in long term. In this study, the authors

has using 3 kinds of techniques namely unit root test and linear & asymmetric

cointegration testing. For the data selection, the author has used monthly data range form

year 1996 to year 2007 available from Arab Monetary Fund (AMF). In the results get

from unit root test, it shows that the oil price and stock market data are integrated with

each other. Then, for linear cointegration testing, it shows that this testing are not able to

explain the long term relationship between oil price and stock market in GCC countries.

Next, for asymmetric cointegration tests, it shows that when oil prices are increase, a

stable long run relationship is appearing between GCC's stock market.

Mohamed El Hedi and Julien (2009)


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CHAPTER-4

DATA ANALYSIS

& INTERPRETATION


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76%

24%

GenderMale Female

(1) Gender Ratio

Male Female76 24

Interpretation:

According to this analysis we can know that 24% female and 76% male fill up ourquestionnaire.


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(2) Which of the following will best describe your occupation?

Occupation Number of respondent

Business 54

Private sectors 16

government sectors 5

Professional 25

Total 100

Interpretation :

According to this analysis we can know about which occupation more trading incommodity and after conclude business is more trading in commodity market.

54%

16%5%

25%

OccupationBusiness Private sectors

government sectors professional


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0% 6%

40%51%

3%

Annual income

Below 50000 50000-100000

100000-300000 300000-600000

Above 600000

(3) What is your annual income?

Annual Income Number of respondent

Below 50000 0

50000-100000 6

100000-300000 40

300000-600000 51

Above 600000 3

Total 100

Interpretation:

According to this analysis we can conclude that more annual income of 300000-600000with 51%.


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73%

27%

Source

Yes No

(4) Have you investing in any source?

Source Number of respondent

Yes 73

No 27

Total 100

Interpretation:

From this analysis we can conclude that 73% customers investing in any source.


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5) Which among these investment criteria you usually prefer?

Investment Criteria Number of respondent

Bank deposites 9

Real estate 7

Stocks 11

Commodity future trading 19

Mutual fund 4

Life insurance 17

Derivative market 4

Bonds 2

Total 73

Interpretation:

According to this chart we can conclude that 19 respondent invest in commodity and 11respondent invest in stocks.

97

11

19

4

17

4 20

510

15

20

Investment Criteria

Number of respondent


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6) Are you aware of commodity market?

Aware of commodity market Number of respondent Yes 63No 37

Total 100

Interpretation:

From this analysis we can conclude that 63% customers are aware of commodity market.

63%

37%

Aware of commodity market

Yes No


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7) If yes, have you invested in commodity market?

Invested in commodity market Number of respondent

Yes 44No 19

Total 63

Interpretation:

From this analysis we can conclude that 44 respondent are invested in commodity

market.

44

19

0

10

20

30

40

50

Yes No

Invested in commoditymarket



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8) How do you come to know about commodity future trading?

Know about commodity future trading Number of respondent

Friends 17

Agents 19

Advertisement 11

Others 16

Total 63

Interpretation:

According to this analysis 19 respondent are know about the commodity future tradingfrom agents.

1719

11

16

02468

101214161820

Know about commodity future trading



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9) Which commodity you prefer for trading?

Prefere commodity Number of respondent

Agro products 9

Precious metal 17

Base metals 11

Energy products 7

Total 44

Interpretation:

From this analysis we can conclude that 17 respondent are prefere for precious metal.

9

17

11

7

0

2

4

68

10

12

14

16

18

Agro products

Preciousmetal

Basemetals

Energy products

Prefere commodity



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7

9

1312

3

0

2

4

6

8

10

12

14

Price Season Risk Return Demand& supply

Factors trading in commodity market


10) Which factor do you normally consider while trading in commodity market?

Factors trading in commodity market Number of respondent

Price 7

Season 9

Risk 13

Return 12

Demand supply 3

Total 44

Interpretation:

According to this analysis we can conclude that risk & return are normally affect tradingin commodity market.


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11) Commodity future market provides benefits?

Benefits Number of respondent Strongly agree 11

Neutral 9Agree 17

Disagree 7Total 44

Interpretation:

According to this analysis we can conclude that 17 respondent are agree to provide benefits in commodity future market.

119

17

7

02

468

1012141618

Stronglyagree

Neutral Agree Disagree

Benefits



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12) What made you not to invest in commodity future trading?

In commodity future trading Number of respondent Not interested 5

Lack of knowledge 3High risk 9

High investment 2Total 19

Interpretation:

From this analysis we can conclude that 9 respondent are not interested in commoditymarket because of high risk.

5

3

9

2

0

12

3

4

5

6

7

8

9

10

Notinterested

Lack of knowledge

High risk Highinvestment

In commodity future trading



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13) Why you are not investing in commodity market?

Not invest in commodity Number of respondent High risk 9

High volume 5High investment 2

Others 3Total 19

Interpretation:

According to this analysis we can conclude that 9 respondent are not investing incommodity market because of high risk.

9

5

23

012345678

910

Not invest in commodity



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14) Are you planning for investing &trading in commodity future market in future?

Future planning Number of respondent Yes 62No 38

Total 100

Interpretation:

According to this analysis we can conclude that 62% customers are planning for

investing &trading in commodity future market in future.

62%

38%

Future planning

Yes No


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CHAPTER-5

FINDING, SUGGESTIONS

& CONCLUSIONS


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5.1 Findings& Conclusion

63 respondent are aware about the commodity future Market

62 respondent are planning for investing &trading in commodity future market in future.

Most of the investors are not ready to invest in commodity market they feel it involve

high risk.

Most of the investors are ready to invest in commodity market if proper information is

provided.

As commodity market is new and emerging ,many investors and farmers are not fully

aware of this market .as the market helps to trade transparently without middlemen and

agents.

While finding the reasons why most of the people are nottrading in commodity market

We found that many respondents are not interested at all in this trade this is because of

lack of knowledge & high risk.

Commodity futures markets are new and emerging market. The awareness of the market

is very less among the investors who can use this trade to sell there products without the

middlemen or agents it also help the actual buyers too.

Here trader also can transfer his risk to some other who can handle it or can appetite the

risk through hedging techniques.


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Compared to capital market commodity market is less risky in volatility context here the

prices do not change within a fraction of second .significantly, minimum margin ready

physical possession, no manipulation & fraud, maximum profitability is available over

here since the commodity market helps all such as farmers, industries and individuals

investors it is growing at a faster rate in global outlook.


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5.2 Suggestions& Recommendation

From survey it is found that most of the potential customers are concerned about the

Brokerage charges so can look upon this.

If it can charge moderate brokerage it will help to attract more and more customers.

More agents and marketing executives should be appointed to educate the customers because

the customers having many things in there mind.

Firm should approach people who are already into the business of commodities .special

campaigns / investors meets should be conducted for these people since they are aware of

rate fluctuation ,market trends etc .

They have got market idea that benefits them in price prediction.

They will be in high spirits when price risk of them will be managed.

Company can arrange seminar to educate the investor. So the the investor can invest more in

the stock market which is indirectly benefit to Angel broking.


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5.3 Learning from the project

According to this project we know about commodity market.

We know about how many respondent aware about commodity market.

After this survey we know about how many respondent interested in commodity market.

We have learn how many respondent planning for future trading.

We also know about Angel commodity products & services provided by company.

Learned the meaning of words that are mostly used in security market.

How to maintain good relations with the clients, employees.


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CHAPTER-6BIBLIOGRAPHY


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Bibliography

News Paper :

Gold- silver price (2013, july 13), Economic times. P.n. 5

Sensex (2013, july 20), Times of india, p.n.6

Web site :

www.angelbroking.com, Introduction of angel ,20 July, 2013

www.moneycontrol.com Show the commodity market, 17 july,2013

www.mcxindia.com Introductionof MCX, 21 july, 2013

www.ncdex.com Introduction & scenario of NCDEX, 21 July, 2013

www.commodityindia.com Recent scenario, 20 July, 2013
http://www.mcxindia.com/http://www.mcxindia.com/http://www.ncdex.com/http://www.ncdex.com/http://www.ncdex.com/http://www.mcxindia.com/


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CHAPTER-7

APPENDICES


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Appendices

NAME : __________________________________

AGE : __________________________________

ADDRESS : __________________________________

CONTACT NO: __________________________________

1) Which of the following will best describe your occupation

Business government sectors

Others

Private sectors professional (please specify)

2) What is your annual income?

Below 50000 50000-100000

Above 600000

100000-300000 300000-600000

3) Have you investing in any source?

Yes No


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4) Which among these investment criteria you usually prefer?

Bank deposits Mutual fund

Real estate Life insurance

Stocks Derivative market

Commodity future trading Bonds

5) Are you aware of commodity market?

Yes No

6) If yes have you invested in commodity market?

Yes No

If No, go to question no. 12

7) How do you come to know about commodity future trading?

Friends Advertisement

Agents Others (specify)


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8) Which commodity you prefer for trading?

Agro products Base metals

(Jira, soybean) (Aluminum, nickel)

Precious metal Energy products

(Gold/silver) (Crude oil)

9) Which factor do you normally consider while trading in commodity market?

Price Risk

Demand & supply

Season Return

10) Commodity future market provides benefits?

Strongly agree Agree

Neutral disagree

11) What made you not to invest in commodity future trading?

Not interested High risk

Lack of knowledge High investment


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12) Why you are not investing in commodity market ?

High risk High investment

High volume Others___________

13) Are you planning for investing &trading in commodity future market infuture?

Yes No

THANK YOU

puja and trushna (1)

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