KARACHI – The country’s commodity exchange market has witnessed robust growth of 561 percent or Rs 157 billion during 2010 as total traded volumes at the National Commodity Exchange Limited (NCEL) stood approximately at Rs 185 billion during the year.
Also, during the year under review the NCEL had marked the achievement of surpassing the combined trading volumes of the Lahore and Islamabad stock exchanges in a very short time.
According to NECL, the total volumes traded last year at the exchange was Rs 28 billion which translates into an increase of 560.7 percent over the same time last year.
During 2010, gold contracts also showed exponential growth of 637.9 percent to stand approximately at 0.642 million contracts against about 87,000 contracts in 2009, it added. This remarkable growth was achieved with more and more institutional and retail investors turning towards the commodity markets, it said. It was also noted that the addition of commodities in the investment portfolio offered an opportunity for diversification as well as a hedge against inflation and the slow growth in equities market. “More and more investors recognize the importance of commodities trading and the numbers keep growing,” the NECL said. While the main focus still remains on gold, the trading volumes have also picked up significantly in silver and crude oil contract categories.
The gold contracts also rose by 0.555 million to stand approximately at 0.642 million during last year. “This rise is on the back of increasing gold prices in the year and more reliability of gold as a safe investment option with comparatively less volatility than equities,” the exchange stated.
It said that the silver and crude oil contracts had also shown encouraging results ever since their listing on the exchange in the year 2010. According to NECL, during 2010, the exchange introduced new contracts of one tola gold and new products, crude oil and silver, on the tradable commodities list. Which, it said, were providing further depth in the market and liquidity to the platform while creating new opportunities for trading and advanced hedging strategies. Another worthwhile addition introduced by the exchange was the launch of a Gold Fund with KASB Funds, the first of its kind in Pakistan.
NCEL Managing Director and Chief Executive Officer Samir Ahmed said, “The Year 2010 also brought in a new wave of memberships from brokers who wanted to offer commodities trading to their clients taking the membership number to 310 on the commodity exchange.”
NCEL is the country’s first de-mutualised electronic futures exchange with a 100 percent institutional shareholding and is licensed and regulated by the Securities and Exchange Commission of Pakistan.
