MCX revamps COMDEX - India's first real-time composite commodity futures index
The Index Maintenance Committee, comprising senior officials from the Indian Statistical Institute (ISI), Credit Analysis & Research Ltd and MCX, today announced changes in the composition and weightage of India's first real-time composite commodity futures index - MCX-COMDEX. The index is calculated and displayed on a real-time basis on MCX Trader Work Stations and at various other display centers
Tweet-- The Index Maintenance Committee, comprising senior officials from the Indian Statistical Institute (ISI), Credit Analysis & Research Ltd and MCX, today announced changes in the composition and weightage of India’s first real-time composite commodity futures index - MCX-COMDEX. The index is calculated and displayed on a real-time basis on MCX Trader Work Stations and at various other display centers.
MCX-COMDEX captures diversified sectors encompassing futures contracts drawn on metals, energy and agricultural commodities that are traded on MCX. The index was initially designed and developed by the Research and Development Department of MCX in association with Indian Statistical Institute (ISI), Kolkata, and launched in June 2005.
Before the changes, the COMDEX was composed of wheat, urad, soya oil, rubber, guarseed, kapaskhali in agri; gold, silver, copper in metals; and crude oil in energy. In order to synchronize index with changing economic dynamics and increased trading activities on the exchange, the Index Committee has decided to revamp its composition and weights.
In the process, group weights in the composite index have been modified from equal weights of sub-indices to 40 percent each in the case of MCX Metal Index and MCX Energy Index and 20 percent in the case of MCX Agri Index. Thus each sector has been given due weightage to represent its significance in the physical and futures markets.
The new composition of commodities and their weights in the MCX-COMDEX are:
Commodity
Final Wts.
Group Wts.
MCX-METAL
1
Gold
16.6%
40%
2
Silver
10.4%
3
Copper
7.0%
4
Aluminum
2.0%
5
Nickel
2.0%
6
Zinc
2.0%
MCX-ENERGY
7
Crude Oil
31.8%
40%
8
Natural Gas
8.2%
MCX-AGRI
9
Ref. Soy Oil
3.1%
20%
10
Mentha Oil
4.5%
11
Potato
3.3%
12
Kapaskhalli
2.0%
13
Cardamom
2.0%
14
Chana
3.1%
15
Guarseed
2.0%
The new composition comes on the back of continuous research, intensive analysis and interaction with economists, statisticians and market players to position MCX-COMDEX as an effective barometer of economic trends in the country. It also enables the Comdex to retain its characteristics as an attractive tradeable index in the longer term.
With its component weightages being adjusted to reflect their physical market shares, COMDEX with its underlying futures prices of commodities could function as the augury of future price trends. It could thereby provide enough leeway for country’s economic managers to take appropriate corrective action if not in advance at least on time.
A precise relationship if established between balance sheet parameters and COMDEX would serve to help corporates with extensive exposure to component commodities take advance remedial measures while charting their growth path and add value for investors.
Investors who own stocks of companies having exposure to primary commodities could use the COMDEX as a guide to hedge their risk in the commodity exchange, thereby bringing stability to the financial markets and strengthening linkages.
Notes to Editor
Headquartered in the financial capital of India, Mumbai, MCX (www.mcxindia.com) is an independent, demutualised nationwide electronic multi commodity futures exchange set up by Financial Technologies with permanent recognition from Government of India for facilitating online trading, clearing & settlement operations for futures market across the country. The exchange started operations in November 2003 and presently is the top commodity exchange in the country with 70% market share of the total commodity derivatives trading volume in the country. Among the top ten commodity derivatives exchanges in the world, MCX ranks among the top three bullion, energy and copper exchanges in the world in terms of contracts traded. The average daily turnover of MCX is about US$2.2 billion
Apart from being accredited with ISO 9001:2000 for quality management, it is the world’s first and only multi-commodity exchange to have achieved ISO 27001:2005 certification, the global benchmark for information security management systems.
MCX offers futures trading in 58 commodities, defined in terms of the type of contracts offered, from various market segments including bullion, energy, ferrous and non-ferrous metals, oils and oil seeds, cereals, pulses, plantations, spices, plastics and fibres. The exchange strives to be at the forefront of developments in the commodities futures industry and has forged eleven strategic alliances across the world, including with Tokyo Commodity Exchange, Chicago Climate Exchange, London Metal Exchange, New York Mercantile Exchange, New York Board of Trade and Bursa Malaysia Derivatives, Berhad.
Financial Technologies India Ltd, a leading provider of transaction automation technologies for Equities, Derivatives, Forex and Commodity markets, is the majority shareholder of MCX. Other key stakeholders include Fidelity International, State Bank of India & its subsidiaries, National Stock Exchange (NSE) and National Bank for Agriculture & Rural Development (NABARD).