National Spot Exchange plans to launch new metal e-products

Will allow smaller investors to participate in the demat trade

BY Siddharth Kumar
Delhi

The National Spot Exchange Ltd (NSEL) sees big opportunity for its e-series products, which allows retail investors to invest in physical commodities in dematerialised or demat form and is planning to launch 20 products under this umbrella by the next year.

E-series consists of a series of investment products in commodities, which are focused on retail investors. Bourse officials say these products are unique as they have turned commodities from mere hedging and raw material sourcing products to investment instruments.

The e-series functions exactly like the equities cash segment but offers commodities in demat form and in lower denominations, thus enabling even small-time traders to invest in these products, said Anjani Sinha, managing director and chief executive of NSEL.

The spot exchange would currently focus on e-series and sees its future growth coming from this segment, he said.

“We are working on a number of non-perishable commodities such as zinc and nickel that we want to launch next. We are planning to have more than 20 e-series products that would include several ferrous and non-ferrous metals by the end of next year.”

NSEL, promoted by Financial Technologies India Ltd (FTIL) and National Agricultural Cooperative Marketing Federation of India (NAFED), currently has three e-series products–e-gold, e-silver and e-copper.

Sinha claimed that since their launch early this year, e-gold and e-silver products have been a huge success with investors. The depository participants (DP) empanelled with NSEL have till date registered more than 22,000 demat accounts.

The e-series have also proved to be a better investment option over other popular investment products in commodities, such as physical gold and exchange-traded funds as these have given more than 25 per cent return in less than six months, said Sinha.

“There has been consistent growth in turnover as well. The current turnover in e–series products ranges between Rs 100 crore per day to Rs 200 crore per day. With more commodities coming under this series, turnover will soon be reaching to the level of Rs 500 crore per day,” he said.

E-copper has been a hit too, witnessing significant volumes and turnover since its launch last week. On the first day of its launch, investment in e-copper was more than Rs 70 crore while the closing price was Rs 452.10 per kg. Boosted by the success of its e-series products, NSEL’s total turnover at the end of its second year of operations soared by a whopping 235 per cent to Rs 7,320.47 crore.

http://www.tehelka.com/story_main48.asp?filename=Ws261110COMMODITIES.asp