International Journal for Scientific Research & Development

IJSRD - International Journal for Scientific Research & Development| Vol. 5, Issue 07, 2017 | ISSN (online): 2321-0613

A Study on Investment Pattern in the Commodity Market with Special References to Sharekhan Ltd S. Sathiya Naveena1 D. Manimegalai2 L. Saeeswari3 1,2,3Assistant Professor 1,2Prince Shri Venkateshwara Engineering College Abstract— The study was made at Share Khan Ltd on the covering different groups such as oils and oilseeds, fibres, etc. topic. The investment pattern in the commodity market. NCDEX is a public limited company incorporated on April Indian economy is growing rapidly; therefore there is a very 23, 2003 under the Companies Act, 1956 good atmosphere for the investment activities. Indian stands It is the first such index to be launched in India. 23rd place in the world in case of capitalization of Investible Based on the components of the spot price index, NCDEX funds. Although we have growing economy, the impact of also displays the national index futures- essentially, the no- global market recession makes the share market fluctuates. arbitrage price if one were to buy futures on the spot index. This has motivated the necessity to take up this study on the Currently, index futures are not allowed in India under the investment pattern in commodity market. The research design FCRA (Forward Contracts Regulation Act, 1952), which followed was Descriptive with Questionnaire model with requires compulsory physical settlement of futures contracts. Sample size of 150 Investors. Graph were used to exhibit the B. Contract Period opinion of Investors in a defined way and Statistical tools like Percentage and chart Analysis, Chi-square test, spearman’s In NCDEX three consecutive calendar month contracts will rank Correlation and correlation co-efficient were used for be available. The MCX is providing different number of effective analysis. contracts for different commodities. For example, in gold Key words: MCX, NCDEX, FCRA there are six contracts in a year (February,April,June,August,October and December); in the I. INTRODUCTION same way for silver too there are six contracts in a year (January, March,May,July,September and November). Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded C. Expiry on Contract Period on regulated commodities exchanges, in which they are At the NCDEX the contracts expire on the 20th day of each bought and sold in standardized contracts. The vast month. If 20th happens to be a holiday the expiry day is the geographical extent of India and her huge population is apply previous working day. At the MCX the expiry day is the 15th complemented by the size of her market. The broadest of every month. If 15th happens to be a holiday the expiry day classification of the Indian Market can be made in terms of is the previous working day. In few cases the expiry day is the commodity and the bond market. Here; we shall deal with also other than these dates, to align the contract with the former in a little detail. The commodity market in India international exchanges. comprises of all palpable markets that we come across in our daily lives. Such markets are social institutions that facilitate D. Trading Hours exchange of goods for money. The cost of goods is estimated The MCX provides trading facility from Monday to Saturday. in terms of domestic currency. India Commodity Market can Its market hours are from 10:00am to 5:00pm.The exchanges be subdivided into the following two categories: also have a trading session in the evening for Gold, Silver and  Wholesale Market few other international commodities. The evening session  Retail Market keeps changing as per international market timings as per the session. Currently it is 5:45pm to 11:00pm.On Saturdays the A. Factors Affecting Commodity Price trading facility is available from 11:00am to 2:00 pm.  Demand and Supply The NCDEX provides trading facility from Monday  Other market like equity, derivatives to Saturday. Its market hours are from 10:00am to 4:00pm in  Inflation the morning session. The evening session of the NCDEX is  Exchange rate from 5:00pm to 11:30pm.Trading in all expiring contracts  Climatic condition ceases at 4:00pm on the contract expiry date. Trading in non-  Political Changes expiring contracts as per the stated trading hours. On  International Scenario Saturdays the trading facility is available from 10:00am to 2:00pm.  Natural calamities MCX COMDEX is a significant barometer for the Multi Commodity Exchange (MCX) is an independent performance of commodities market and would be an ideal commodity exchange based in India. It was established in investment tool in commodities market over a period of time. 2003 and is based in Mumbai The turnover of the exchange It is designed & developed by the Research & Planning for the period Apr-Dec 2008 was INR 32 Trillion.MCX offers Department of Multi Commodity Exchange of India Ltd. futures trading in Agricultural Commodities, Bullion, Ferrous (MCX) in association with the Indian Statistical Institute & Non-ferrous metals, Pulses, Oils & Oilseeds, Energy, (ISI), Kolkata. It is composite for MCX AGRI, MCX Plantations, Spices and other soft commodities. METAL & MCX ENERGY on commodity futures prices The NCDEX Commodity Index is an equal- have been developed to represent different commodity weighted spot price index of 20 agricultural commodities segments as traded on the exchange.

II. OBJECTIVES Income Level No of Respondents % of Respondents Below 200000 17 12 A. Primary Objectives 200001-400000 47 33 To study the investment pattern in the commodity market 400001-600000 37 27 600001-800000 26 19 B. Secondary Objectives Above 800000 13 9  To know the customer awareness in the commodity Total 140 100 market. Table 2: Table Showing the Respondents Income Level  To study the preference towards the commodity market Occupation No of Respondents % of Respondents over the stock market. Govt. Employee 17 12  To analysis the investment preference towards the Pvt. Employee 43 31 different commodities. Business 52 37  To know the risk and return of the selected commodities. Professional 23 16 Others 5 4  To find out the factors which affect the investment Total 140 100 decision of the investors. Table 3: Table Showing the Respondents Occupation C. Scope of the Study Respondents No of Respondents % of Respondents Yes 124 89  To study the different modes of investment among No 16 11 individual investors. Total 140 100  To know the commodities traded in commodity market Table 4: Table Showing the Investors Preference towards which is mostly preferred by the investors. Investing in the Commodity Market  To analyses the factors considered by the investors while Respondents No of Respondents % of Respondents trading in commodity market. Below 200000 41 29  To survey the varied Strategies which are followed by 200001-300000 46 33 the investors 300001-400000 30 21  To know the factors which affect the investor’s 400001-500000 14 10 investment decision. Above 500000 9 7  It welcomes the new investors into the market. Total 140 100  The research will help to the organization to know about Table 5: Table Showing the Respondents Portfolio Size investor’s attitude towards commodity market. Respondents No of Respondents % of Respondents Intraday 50 36 D. Need of the Study Positional 50 36  The Investors prefer Commodity market because of the Delivery 40 28 diversified Investment avenues, which will help the Total 140 100 Investors to retain the profit. Table 6: Table showing about how often do the Respondents Turn-Off their Position  From the price variation of the commodities, the Respondents No of Respondents % of Respondents investors getting the profit. The speculation is very Media 22 16 common in the market. All the elements of the Internet 35 25 investment are giving positive results to the investors. Tele callers 34 24 Risk is high in the commodity market than the stock Brokers 35 25 market, so the return is also high in the commodity Peers/Relatives 14 10 market. Total 140 100  Although there are various investment opportunities why Table 7: Table Showing the Investors Source of Information some of the people preferring the commodity market. to Invest in the Commodity Market.  The study also helps to company to know more about the Respondents No of Respondents % of Respondents investors in order to improve their service performance. Liquidity 18 12  The investor have some confusion about the commodity Volatility 24 17 Longer trading market, its prevent the investors to enter into the market. 60 43 The study about the commodity market gives the clear time Attractive risk idea about the commodities; it can reduce the confusion 32 23 reward ratio at some extent. Others 6 4  In order to know the risk and return of the investment and Total 140 100 to reduce the risk and maximize the return. Table 8: Table Showing the Investors Preference to Invest on the Commodity III. DATA ANALYSIS Very Ra Respondent Ofte Moderat Ofte Occasionally rel Age Group No of Respondents % of Respondents s n e 20-25 28 20 n y 26-30 47 33 Hedging 58 44 25 2 2 31-35 42 30 Speculation 30 35 44 18 4 Above 35 23 17 Total 88 79 69 20 6 Total 140 100 Table 9: Table showing which Strategies do the Investors Table 1: Table Showing the Respondents Age Group use more

Respondents No of Respondents % of Respondents REFERENCES Yes 131 94 [1] Khan M.Y & Jain P.K, Financial Management, New No 9 6 Delhi: Tata McGraw Hill Education Private Limited, Total 140 100 Fifth edition. Table 10: Table showing whether the Respondents use the [2] Hess, Robert D. (1970), “Social Class and Ethnic Strategies Influence Upon Socialization,” in Manual of Child Respondents No of Respondents % of Respondents Yes 130 85 Psychology, 3rd Ed., ed. Paul Mussen, New York: John No 10 15 Wiley & Sons, Inc., 457-449. Hirschi, T. (1969), Total 140 100 Causes of Delinquency, Berkeley: University of Table 11: Table showing whether the Respondents are California Press. trading both in stock market and commodity market [3] Matsa, D. (1969), Becoming Deviant, Englewood Cliffs, Respondents No of Respondents % of Respondents New Jersey: Prentice-Hall, Inc. 0%:100% 12 9 [4] Lastovicka, J.L., J.P.Murray, Jr., E.A. Joachimsthaler, 25%:75% 36 26 E.Bhalla. and J.Scheurich(1987),”A Lifestyle 50%:50% 63 45 Typology to Model Young Male Drinking and Driving.” 75%:25% 21 15 Journal of Consumer Research, 14 (September), 257-62. 90%:10% 8 5 [5] Linden, E. and J. C. Hackler (1973),” Affective Ties and Total 140 100 Delinquency,” Pacific Sociological Review, 16 Table 12: Table showing the Proportion in which the (January), 27-46. Investors are investing in both stock market and Commodity [6] Cohen, A. (1955), Delinquent Boys, New York: The Free market Press of Glencoe. Respondents No of Respondents % of Respondents [7] Verily, A.H. (1978), Reducing Shoplifting Losses, High risk 70 58 (Revised Edition) Washington, D.C.: Small Business Moderate risk 49 25 Administration. Low risk 21 17 [8] Stores (1971), “NRMA’S and INAE’S National Total 140 Campaign to Fight Shoplifting,” (November), 6. Table 13: Table showing the rating of commodity market based on the risk factor Web Site Refers To Respondents No of Respondents % of Respondents [9] www.google.com Very high 30 21 [10] www.wikipedia.com High 53 39 [11] www.ebscohost.com Moderate 42 30 [12] www.sharekhan.com Low 9 6 [13] Financial derivatives and risk management by Very Low 6 4 L.C.GUPTA Total 140 100 Table 14: Table showing the Investors Awareness level on different types of commodities Factors No of Respondents % of Respondents (Equity, 28 20 derivative market) Price fluctuation 38 27 Climate condition 17 12 Natural calamities 9 6 Inflation 26 18 Foreign currency 18 13 ex. Rate Others 4 3 Total 140 100 Table 15: Table showing the Factors which will affect the commodity market

IV. CONCLUSION This study is concluding that most of the investors prefer gold as their investment avenues because of the high return. It is always assessed that as risk increases the return too increases. There is always a trade-off between the risk and the return factor. The Customer preference towards more in crude oil and gold. The commodity investment is the securitized investment which provides safety as well as liquidity for the investors in the current scenario because of the fluctuations happening in the stock market. The factors that affect in the commodity market are (or) price fluctuation, equity, derivative, inflation.