...equity markets are sizable, expanding and fast growing. Asia specific derivative market has hold nearly 40 percent of world capitalization in 2015 and having annual volume of 9.7 Billion. Markets in countries like Japan, Korea, Malaysia, China, India and Korea are also sizable. Indian, China and Malaysia were second tier exchange in derivative market but growing rapidly. 2.0 Development of Derivative Market 2.1 Malaysia Malaysia start joining the derivative market trading community in October of 1980’s with the launched of crude palm oil futures at Kuala Lumpur Commodity Exchange (KLCE). KLCE was known as the first futures exchange in Malaysia and all of Southeast Asia, established in 1980. In December of 1995, Kuala Lumpur Options and Financial Future Exchange (KLOFFE) were officially licensed as a futures and options exchange, and trading on in its flagship stock index futures. In December 1998, KLCE and Malaysia Monetary Exchange (MME) were merged to establish Commodity and Monetary Exchange of Malaysian (COMMEX). Shortly after, in January 1999, KLOFFE became subsidiary of Kuala Lumpur Stock Exchange (KLSE). In June 2001, KLOFFE merged with COMMEX and form Malaysian Derivative Exchange (MDEX). Later Bursa Malaysia Derivative Berhad has listed in 2005. 2.2 China In 1980’s the relevant department study abroad to prepare and actively preparing for China's futures market .The China Zhengzhou Grain Wholesale Market, was the first commodities futures market opened at China in...
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...last report titled ' Comprehensive Analysis of Indian Starch & Starch Derivatives Sector ' a deep tabular and a brief theoretical analysis was presented of last 10 Years' Data to understand the scope and potential of Indian Starch & Starch Derivatives Sector. Now, in this report, we will present a deep theoretical argument based on the study of Chinese Starch & Starch Derivatives Sector over last two decades to understand the tremendous growth opportunity Indian Starch & Starch Derivatives Sector provides in the coming decade. It is worthwhile to note here that Indian Sector is almost a replica of Chinese Sector and Indian Sector, as at 2010, is at a stage where Chinese Sector was there in 1992. Over the time period between 1992-2009, Chinese Starch & Starch Derivatives Sector has grown more than 10 times and Indian Starch & Starch Derivatives Sector is bound to replicate such growth in the span of coming 10 years. We will also include in our analysis the consumption-trend of Sugar vis-a-vis Starch in China as well as India as Starch-based sweetners form 50 % of the marketsize of Chinese Starch & Starch Derivatives Sector whereas use of Starch-based sweetners as a substitute to sugar is only now catching up fast in India. We will also discuss briefly in this report the valuation aspect of Chinese and Indian sector at macro level and micro level to understand the gross undervaluation of Indian sector vis-a-vis China and a certain rerating expected of Indian Sector to correct this undervaluation...
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...INDIAN DERIVATIVES MARKETS 1 Asani Sarkar 1 I gratefully acknowledge the assistance of Arkadev Chatterjea, Neel Krishnan, Golaka C. Nath and V. Soundararajan in the preparation of this article. The views expressed in this article are mine alone, and do not necessarily reflect those of the Federal Reserve Bank of New York, or the Federal Reserve System. Derivatives OUP 1 1. Rise of Derivatives The global economic order that emerged after World War II was a system where many less developed countries administered prices and centrally allocated resources. Even the developed economies operated under the Bretton Woods system of fixed exchange rates. The system of fixed prices came under stress from the 1970s onwards. High inflation and unemployment rates made interest rates more volatile. The Bretton Woods system was dismantled in 1971, freeing exchange rates to fluctuate. Less developed countries like India began opening up their economies and allowing prices to vary with market conditions. Price fluctuations make it hard for businesses to estimate their future production costs and revenues. 2 Derivative securities provide them a valuable set of tools for managing this risk. This article describes the evolution of Indian derivatives markets, the popular derivatives instruments, and the main users of derivatives in India. I conclude by assessing the outlook for Indian derivatives markets in the near and medium term. 2. Definition and Uses of Derivatives A derivative security...
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...DEVELOPMENT OF DERIVATIVE MARKETS IN EMERGING MARKET COUNTRIES1 A. Background Derivatives are commonly used for managing various risk exposures, including foreign exchange, interest rate, and credit risks. By allowing investors to unbundle and transfer these risks, derivatives contribute to a more efficient allocation of capital, in many cases reduce market and portfolio volatility, facilitate cross-border capital flows, and create more opportunities for portfolio diversification. Despite rapid growth over the past several years, Emerging Market (EM) derivatives account for only about 10 percent of the total outstanding notional values in global derivatives markets. Compared to mature markets, the ratio of outstanding notional value of derivatives to market capitalization of the underlying asset markets is fairly small in most emerging economies and is mainly focused on sovereign risks. The most common issues that challenge the development of local derivatives markets are (i) relatively underdeveloped markets for the underlying assets; (ii) lack of adequate regulatory, legal and market infrastructure, and (iii) restrictions on the use of derivatives by local and foreign entities.2 The problem of misuse of derivatives is perceived to be more acute in emerging market countries where prudential regulation, credit information infrastructure, and risk management practices are not fully developed and maybe in conflict with reasonable economic, investment or portfolio objectives. This...
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...A PROJECT REPORT ON COPPER: THE BROWN GOLD Submitted to the Mumbai University in partial fulfillment of the requirement for the award of M.M.S. Degree GUIDE MR. SANJIV BARVE by SURESH CHANDRAN MMS - FINANCE ATHARVA INSTITUTE OF MANAGEMENT STUDIES MALAD-MARVE ROAD, MALAD (WEST), MUMBAI 400095 BATCH 2006-2008 CERTIFICATE This is to certify that the project entitled “COPPER: THE BROWN GOLD” is the bonafide work carried out by Mr. Suresh Chandran, student of M.M.S. Batch 2006-2008, Atharva Institute of Management Studies, during the year 2007-2008 in partial fulfillment of the requirements for the Post Graduate Degree of Master of Management Studies and that the project has not formed the basis for the award of any other degree, associate-ship, fellowship or any other similar titles. Sd/- Mr. Sanjiv Barve Project Guide & Faculty Member Atharva Institute of Management Studies Date: Place: ACKNOWLEDGEMENT I would like to take this opportunity to express my sincere and heart-felt gratitude towards my institute, Atharva Institute of Management studies for giving me this wonderful experience to guide my first steps into a Career in Finance. I express my appreciation towards our Dean, Mr. N. S. Rajan, who believed in me and provided me with a great learning canvass to expand my perspectives and learning horizons. I offer my sincerest thanks to my eternal academic guiding star, Mr. Sanjiv Barve, my project guide for his immense help. His guidance...
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...Best Buy enters India by Francisco Polo Professor Hamid Assar International Finance – FIN535 May 22, 2012 Summary Best Buy Co., Inc. is an American specialty retailer of consumer electronics in the United States, accounting for 19% of the market. It also operates in Puerto Rico, Mexico, Canada and China. The company's subsidiaries include Geek Squad, CinemaNow, Magnolia Audio Video, Pacific Sales, and, in Canada operates under both the Best Buy and Future Shop label. Together these operate more than 1,150 stores domestically and internationally. In addition, the company operates over 100 Best Buy Express Automated Retail stores or "ZoomShops", operated by Zoom Systems, in airports and malls around the U.S. The company is headquartered in Richfield, Minnesota, United States. On March 9, 2009, Best Buy became the largest electronics retail store (online and bricks and mortar) in the eastern United States, after smaller rival Circuit City went out of business. Fry's Electronics remains a major competitor in the western United States, while Hhgregg remains competitive in the eastern United States. Many locations feature in-store pickup, which can be arranged through the company's website. As of December 28, 2008, the company operated 1,010 Best Buy Stores, 13 Magnolia Audio Video Stores (specializing in high-end electronics), 7 stand-alone Geek Squad stores, 3 Audio Visions Stores, 13 Best Buy Mobile Stores (standalone) and...
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...Fall 16 AFM 431 -‐ Essay Group 9 Neeraj Venkatraman, Rahul Bhambhani, Steven Yang, Ahmed Husain, Dilraj Dhillon In today’s world, businesses have moved from complicated to downright complex. Firms, industries, and global business systems continue to invest in, employ, utilize, and revolve around many varying, technical, formal tools and mechanisms in the business world. In the context of global business, complexity can be loosely defined as the state of intricacy of interactions of people, objects, events, and transactions. The modern business world and the business environment is highly complex in its nature, and therefore transparency is essential for shareholders and investors to better understand their investments, as well as deter fraudulent behavior. The complexity in the modern business world, and its need for transparency can be evidenced through an examination of 3 levels: company-wide, industry, and globally. Looking on a company-wide basis, a lack of transparency on the part of individual organizations can lead to fraud and unethical practices, whereas a demonstration of strong transparency reduces the impact and likelihood of scandals. Enron, a leading energy and natural gas provider was accused of an accounting fraud in 2001. One of the primary reasons that led to this scandal was Enron’s usage of special purpose entities (SPEs) to cover up debt that the company was taking upon...
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...FIN 3103 FINANCIAL MARKETS AND INSTITUTIONS– SECTION 1A AN INTRODUCTION TO THE ASIAN EQUITY MARKET & ITS EXCHANGES SAMUEL TOW WEE YAP (A0102724U) LIEW KUANG CHEN JOEL (A0004624U) ANG CHUAN HWEN JEREMY (A0080928X) LIAW YIH HANG (A0091535E) WU GUIYAN (A0100395N) ZHAO CHUANYI (A0105563L) Contents 1. Introduction ..................................................................................................................................................................................................... 4 2. Objectives of the Stock Market ................................................................................................................................................................. 4 2.1 Capital Formation ......................................................................................................................................................................................... 4 2.2 Connecting Traders ...................................................................................................................................................................................... 4 2.3 Security............................................................................................................................................................................................................. 4 2.4 Economic Indicator ...................................................................................................
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...Issues and Concerns of Commodity Derivative Markets in India: An Agenda for Research Nilanjan Ghosh 1. Introduction Commodity derivative markets have traditionally been a contentious issue at various policy forums across the world, particularly with the imbroglio created by allegations from various corners that they encourage excessive speculation and are therefore responsible for the recent commodity price escalation. While this suspicion of excessive speculation in the commodity markets has always been there among policymakers in developing nations like India, it has become more widespread since 2008 in the wake of worldwide inflationary pressures on food and energy. The sudden deflation in the value of various assets underlying different derivatives, which includes commodity derivatives, in the wake of the global meltdown has provoked greater apprehension about the economic utility of futures markets. The suspicion has reached such a high that even the U.S., the biggest proponent of market forces with the most active commodity exchanges in the world, is considering new modes of regulation, and is also investigating the role of commodity derivative trading in the steep rise in prices of wheat, rice, and crude oil. On the other hand, ever since commodity derivative trading was allowed in India in the new millennium, there has always been a hue and cry against such markets, with the alleged notion of excessive “speculation”, though there has rarely been any evidence for it. Rather...
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...Finance Paper To comprehend how worldwide banking has made it easier for Wal- Mart to attain its growth plan, one has to understand the contents of the worldwide banking process. According to financial experts worldwide investment banking includes acquisitions, mergers, underwriting, distributing equity, debt, financial restructurings, derivative securities, and divestitures. As far as Wal-Mart is concerned acquisitions and mergers have allowed them to establish and expand its being there in nations not fond of global nations; namely India and China. (Wal-Mart, 2010). With the world’s population at 6.8 billion and with China and India’s combined population approximated at 2.5 billion; both countries make up almost 40percent of the world’s population. Trying to tap into the biggest markets in Asia offers vast potential for expansion and profits for Wal- Mart. On the other hand India and China prove to be difficult markets an American company to go into because the government lacks related transparency, and discriminates American firms. To rise above the difficulties of foreign investments and increase its presence in China and India, Wal-Mart is relying on merging and using joint ventures. Wal- Mart’s venture consists of a 35 percent interest in China’s BCL (Bounteous Company Limited), and a joint investment in India’s Bharti Enterprises. Despite the fact that, the advantage of the global banking process, explicitly in joint investments, Wal- Mart has been successful...
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...causes. For example, when people discuss the collapse of the financial markets, the most frequently mentioned word is subprime mortgagewhich is considered as the culprit of the crisis. Yet, is subprime mortgage the root of the crisis? If it was, then the question would be how this type of financial product, which is only marginal part of the financial market, could cause such a catastrophic crisis. Specifically, systemic risk was developed. Essentially, subprime mortgage is a mere part of superficial reasons of the crisis and was induced by other underlying factors which will be discussed in the essay. Due to the current situation, it is necessary to correct such misunderstandings. According to the statistics issued by the National Bureau of Statistics of China, GDP growth rate of China has dropped from nearly 12 per cent three years ago to a more subdued 7.5 per cent in the second quarter. Despite a year and a half of recession, Euro zone’s GDP rose at an annualised rate of 1.1 per cent in the second quarter, this pickup still leaves GDP across the Euro area 0.7 per cent lower than a year ago (The Economist, 2013). This essay will argue that in order to resolve the current economic problems it is crucial to identify the underlying causes rather than accepting superficial reasons. It will also be argued that there are three key reasons for the crisis: monetary policy mistakes, mispricing in capital markets and financial globalisation. Firstly, the mistakes made by the...
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...STOCK EXCHANGES IN INDIA Module Objectives The main objective of this module is to explain the structure of organized exchanges for trading in stocks, commodities and derivatives. The features of derivative instruments like forwards, futures, options and swaps are also described. Module Contents 5.1. Stock Exchanges 5.2. Commodity Exchanges 5.3. Derivatives 5.4. Currency Futures in India 5.1 Stock Exchanges in India 5.1.1 History and Development Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meagre and obscure. The East India Company was the dominant institution in those days and business in its loan securities used to be transacted towards the close of the eighteenth century. By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks and merchants during 1840 and 1850. The 1850's witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60. In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began (for...
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...Chapter – I INTRODUCTION 1.Introduction of Project Work : Why Commodity Futures? ADVANTAGES OF FUTURES MARKET TO ITS VARIOUS PARTICIPANTS Stockiest / Jewelers / Farmers | | Traders, Jobbers & Arbitragers | * Can hedge their underlying * Get an extensive market * Can get loan against Warehouse Receipts | | Trading Opportunity | Investment Opportunity | Corporates | | Additional Advantage | * Can hedge by offsetting product exposure * Can hedge by parking only margin amount * Can buy goods without agents with Quality Assurance | | Spread Trading Opportunity | Arbitrage Opportunity | TABLE-1.1 Why Indian Commodity Exchange? India is essentially a commodity based economy constituting of Agriculture, Energy, Precious Metals and Base Metals. Couple of unique features / advantage seen in our exchanges, which is not seen elsewhere, are: 1. Timings: Our Trade timings are well matched with Global Market timings. 2. Number of commodities: Nowhere in the world more than 8 to 10 commodities are traded in a single exchange, but our exchanges are successfully managing over 40 commodities individually. Why Sharekhan? Superior & Consistant Research Performance of…. 1. Cutting Edge Analysis of Major Commodities 2. Relevent Analysis of Market News & Information 3. Sound Technical Analysis for Short Term Trends 4. Special Reports such as… * Hedge Solutions: To offset Product Exposure...
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...Sixth Possible Serious Economic Danger for 2015 and Beyond A report by Sandeep Vete 1 DANGER #6: Collapse of US Dollar as world’s de-‐facto currency The modern US currency under the “Dollar Standard” is a FIAT currency but the underlined reality is that the world oil trade and the strength of US military backs the US Dollar. Source: w ww.beforeitsnews.com Demand for dollar is created by its “Petro-‐Dollar” status and mitigates the inflation to a large degree by distributing the consequences globally and not merely affecting United States. Essentially US writes the hot check and the world has to pay the bills. (When Will The Economy Collapse? 2013, July 24) This system is perfect till no one decides to twist the system like Iraq did in 2000 by selling oil in euros or Libya did by try pulling most of Africa off the...
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...Chemical Industry: A Potential Chemical Hub for Exploration at World Market Authors: Amrit B Karmarkar*1, Avinash D Deodhar1, Aditya A Holikar2 Affiliations: 1. Director, InClinition, Dombivli East, Mumbai Area, India 2. Research Associate, InClinition, Dombivli East, Mumbai Area, India Email: amrit@inclinition.com Cellular: +91-8898904115 Introduction of Chemical Industry Chemicals are the basic necessity of day to day life for creature to survive on earth. The chemicals whether being natural or synthetic they are helpful to each and every creature for the survival. Right from the food we eat, clothes we wear or the cars we drive all the things are significantly based on the chemicals which helps to enhance the quality of life through various new innovations. The use of chemicals is mentioned from the ancient time to the modern era. As the development on earth started from the ancient era to modern era for the survival and the enhancement of the chemicals, their forms and their uses changed. Development of synthetic chemicals took place by setting up the chemical factory in countries and then export and import of chemicals from country to country. As the modern era is concern, the chemical industry has acquired the special attention by Compound Annual Growth Rate (CAGR) at 5.9% for the revenue generation of $ 3,519 billion till year 2010. It is expected to grow up to 8.1% generating $ 5,185 billion by 2015(Market Line Report). The growth is observed due to new advancement of the...
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