Comen starts futures contract for wheat

Commodities and Metal Exchange Nepal (Comen) has started the futures trading of wheat as its tenth commodity.

The exchange has brought three types of contracts for the wheat trading – Wheat October, Wheat November and Wheat December. The trading will be undertaken under matching basis. The futures contract for wheat expires in three months. The unit for contract has been determined as 10 tonnes and commission for each unit is Rs 150, according to the Comen — the oldest commodity exchange in Nepal.

Comen has taken the price determined by Morang Trade Association as the basis price. The trade settlement for the day contract will be based on the day's wheat price quoted by Morang Trade Association.

However, the futures contract being based on matching basis, Comen will deliver the wheat only if the buyer and seller both agree on delivery. Apart from wheat, Comen is involved in the Gold, Silver, Zinc, Copper, Crude Oil, Nikkel, Lead, NLS and Aluminium futures contract.

The exchange is all set to start the futures trading of Sugar as the eleventh commodity soon.

Comen launches new contracts

Commodities & Metal Exchange Nepal Ltd (Comen) has launched new contracts in order to cater to the investment needs of its clients. "We have added new sizes of gold, natural gas, crude oil and zinc," said the Comen. "Besides the existing one-kg and 100-gm gold contracts, we have launched a new gold contract of 500-gm," it said adding that it has also launched a new 1,250 mmBTU natural gas contract along with two new crude oil contracts with the size of 300-barrel and 50-barrel.
"Under zinc, we have launched a new five-tonne zinc contract," said the first state-of-the art exchange in Nepal.
Comen was the only exchange in Nepal to have such investment and technical support from the commodity relevant institutions until some time ago. Currently, there are three commodities exchanges.
Mercantile Exchange Nepal Ltd (Mex) and Nepal Derivative Exchange (NDEX) are the two other exchanges for commodity & futures markets.
These are the platform for the futures that is primarily intended for hedging and speculation. Contracts in futures market result mostly in cash settlement and do not frequently result in delivery.
With the establishment of Mex, new investment sector has been generated where investors can mitigate their risk in different commodities ranging from precious metals, energies to agro-products.

MEX receives guest
KATHMANDU: Deputy Minister for Child Development and Women’s Affairs of Sri Lanka visited Mercantile Exchange Nepal Ltd (Mex) to know about the operational set-up of futures market in Nepal. MLAM Hisbullah, who landed in Nepal on Monday on an official visit, went to the exchange. Hisbullah took time from his busy schedule and met Dipendra Khatiwada, MD and Mr Jitesh Surendran, CEO of Mex to understand the functioning of MEX in Nepal. Hisbullah also visited Nepal Spot Exchange (NSE).

Comen starts crude oil, natural gas contracts

Commodities & Metal Exchange Nepal (Comen) has opened two new commodity futures contracts trading platforms -- 'crude oil' and 'natural gas' -- from today.

"As a part of our constant efforts to provide value and new products to our investors, we are pleased announce two new products," said Vijay Satyal, chief executive officer of Comen.

The contract symbol for crude oil is CRUDE OIL and Comen is launching CRD/APR/10 contract. The trading unit for crude oil is 100 barrels and the base price will be displayed per barrel, he said adding that the intra-day margin is Rs 40,000 per unit with an overnight equity of Rs 80,000 per unit.

The commission charge will be Rs 1000 and VAT.

Similarly, the contract symbol for natural gas is NATURAL GAS and Comen is launching NG/APR/10 contract. According to Comen, the trading unit is 1250 mmBtu and the base price will be displayed per mmBtu.

"The intra-day margin is Rs 30,000 per unit with an overnight equity of Rs 60,000 per unit," it added. The commission charge will be Rs 1000 and VAT.

"We also remind our customers that these two contracts are subject to cash settlement," Satyal added.

Training on commodities market ends

The commodities market is emerging, it has immense growth potential and will continue to expand in multiple horizons within two years, said experts at a two-day workshop on 'Futures and Derivatives Market (Commodities, Forex, Options, Structured Products)' that concluded here today.
Since the market is complicated and ruled by international events, economies, new investors need to be educated fundamentally and technically. A training workshop was the need of the hour, Frank Reudi from Swisscontact said in the programme organised by Jamb Technologies with technical assistance of Swisscontact in close coordination with Morningstar Investment Service (a subsidiary of Jamb) and United Finance.
Currently, there are around 50 registered brokers who are involved in commodities business and the business has already spread Kathmandu Valley. According to estimates, there are around 8,000 traders of whom 5,000 are active in the market, Morningstar Investment Service said.
With the growth of the market, more complaints and greivances are also coming up and to address them a regulation is a must. "Intially, we didn't have a market, but now we have a market spread all over Nepal, and it needs to be regulated," according to Morningstar. "Tax imposed on commodites trading should also be scientifically addressed as there should be the provision of rebate and charges on net profit not on gross profit such as what prevails.
Swisscontact is the organisation of the Swiss private sector for development cooperation which aims to promote private economic and social development in selected countries in South and East Asia through advisory services, training and continuing educationCommodities and Metal Exchange Nepal (COMEN) that started its operations in 2007, Mercantile Exchange Nepal (MEX) and Nepal Derivative Exchange Ltd that have just started are some of the exchanges. There are four to five commodities exchanges also in the pipeline.
Commodities market is a type of financial market like capital market, money market, derivatives market, foreign exchange market and insurance market but it has wider scope on the domestic front.

Comen starts copper, zinc futures

Comen has introduce three new metals - silver, copper and zinc — to be traded that provide investment, hedging and arbitration opportunities for the customers.
Silver, copper and zinc — extensively used for household utensils, wiring and jewellery — will boost the future market demand benefiting the producers, investors and traders, states a press release. "Currently the demand for zinc in Nepal is huge, which is a definite scope that will provide transparency to markets and help manufacturers earn remunerative returns," it adds.
Comen, established in 2006, is the first and only commodities and metal exchange in Nepal. Commodity and metal are considered ideal tools for economic progression. An exchange is an institution that hosts a market where stocks, bonds, options and futures, and commodities are traded.
Comen has also entered into a strategic alliance with Jamb technologies to initiate derivative training to its brokers and investors and enhance their skills. It conducts various training and educational programs related to derivative market to make the market more vibrant. "Comen, with the objective of bringing the act of Public warehouse system, also aims at fostering the flow of international investment, promoting sustainable growth of capital market and generating employment," claims the release.
With the advantages of price discovery of both cash and futures, creating savings and investments in the long run, developing intellectual capital awareness and representing broad based economic indicators like GDP, National income, Comen is eager to develop commodity futures market in the context of globalisation.It has also first started its trading in gold futures with a minimum spread, states a press release. "Comen maintains a maximum volume in a day transaction in Futures gold contract of 1kg, 500gms and 100gms respectively.

NEW ENTRIES
Metals Unit Contract Size
Silver 1 kg 30 kg
Copper 1 kg 1000 kg
Zinc 1 kg 5000 kg

Gold Rush: Its never too late to invest on yellow metal

Did you know you do not need fat wads of greenbacks to buy gold from New York? And, did you know you can purchase it right from your home without having to make a full payment, avoiding several costs and risks associated with it?
Commodities and Metal Exchange Nepal (Comen) has introduced gold as the first metal to the country's futures market under futures contract. A futures contract is an obligation to buy or sell a specific quantity of gold, say, one kilogram, just by investing a part of the total value.
Buying futures obligates one to take delivery at a particular date in the future. To trade in gold futures, one has to initially deposit a margin money of Rs 50,000 for a kg and Rs 30,000 for a half kg, to be delivered within three months.
Some have already made a fortune in past nine months since Comen started the futures trading of the precious yellow metal. "It's never too late to join the gold rush," says Vijay Satyal, CEO and director of Comen. "Futures traders can also dispose it off almost instantly, and certainly on a profit margin."
Why invest in gold? "Because it's a wise investment like equities and land and can easily be converted into money," says Satyal. "Perhaps, no other market in the world has the universal appeal of the gold futures market. Around the world, gold has always established itself as a traditional store of purchasing power and it's gaining ground due to the weakening of the US dollar."
"Gold hit historic highs at $924 an ounce on Friday," he says.
Earlier, one would have to hoard and trade in gold physically. "Now one has the option of not physically stocking it to gain from its price movements," said Dirghayu N Bhari, a business promoter affiliated with the Comen. "Trading in futures is better than the option of hoarding gold," said Bhari. "There are several costs associated with the process of physically stocking gold – transportation, storage, and safety risks, just a few to mention."

The futures trading are certainly not free from risks, though. Here one must trade carefully. Before becoming too excited about the lucrative returns possible from futures trading, it is a good idea to take a sober look at the risks. "Futures traders can however arbitrate and mitigate the risks if they are fully aware of these," said Satyal. Although the risks can be managed, they can never be eliminated, he added.
Managing the risks of trading is a very important part of any trader's success.