NCEL’s remarkable year on year growth in 2010 has further picked up speed in the new Year. After the previous monthly milestone, reached in November 2010, of more than 100,000 contracts traded at the exchange, NCEL has very rapidly achieved the next milestone. In January 2011, a total of 159,469 contracts were traded with a total value of Rs 44.5 billion. This marks a positive beginning to the year 2011 and business is expected to continue to grow rapidly.
This growth has become possible because of increased investor interest, which follows from a better understanding and awareness of the benefits of a regulated futures market. Commodities, as an asset class, are now well established globally and are now finding their rightful place in the investment portfolios of domestic investors also.
This is reflected in a comparison of the business volumes of NCEL vis a vis the stock exchanges in Pakistan. NCEL is the largest exchange in Pakistan in terms of its membership with more than 310 members and the second largest in terms of business volumes after the Karachi Stock Exchange. In January 2010, NCEL’s trade value of Rs 3,145,020,155 was only 1.8 % of the KSE’s traded value of Rs. 163,657,691,294. By January 2011, while KSE’s trade values moved up marginally to Rs 166,472,091,088 NCEL, with a trade value of Rs 44,475,834,714 was a significant 26% of the KSE’s traded value.
“It is encouraging to see the sustained rise in NCEL trading volumes,” said Samir Ahmed, MD and CEO National Commodity Exchange Limited, “and we expect to see this trend continuing strongly with greater participation from individual and institutional investors as the product range grows during this year.”
NCEL, as the country’s first and only commodities and futures exchange, offers a platform where growers, producers, processors, traders, exporters, importers and investors can trade with ease. By providing a transparent and regulated market, it enables proper price discovery and enables participants to invest and hedge themselves against the price volatility of agriculture and non-agriculture commodities. Currently, there are five commodities, Gold, Silver, Crude Oil, IRRI Rice and Palm Olein as well as KIBOR Interest Rate Futures available for trading. In order to cater to the needs of different market participants, NCEL provides a variety of contracts in terms of lot size and time periods. The upcoming commodities that are expected to be listed this year include Sugar, Wheat, Cotton, Maize and Currency Futures.
National Commodities Exchange Limited is Pakistan’s first and only de-mutualized exchange with a 100% Institutional shareholding and is licensed and regulated by the Securities and Exchange Commission of Pakistan.
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