NCDEX ties up with NSE Indices to launch AGRIDEX, India's first
agri index
Thu Nov 14 2019
In a major move, the National Commodity and Derivatives Exchange
(NCDEX) has launched India’s first agri index — ‘NCDEX Agridex’, for easy
reference to price variations in agricultural commodities.
Launched with a composition of 10 leading liquid contracts on the
NCDEX platform at present, the index is now available as ‘indicative’. It will
be made tradable after being approved from the Securities and Exchange Board of
India (Sebi). NCDEX has already applied for a formal approval from Sebi, which,
according to trade sources, is likely to be cleared soon.
The NCDEX’s index launch is in continuance with Sebi’s plan to broaden
its horizon in commodities trading through the introduction of a new set of
players and products. Sebi has already allowed some sections of mutual funds to
trade in select commodities. The regulator had also allowed trading in
‘options’ in leading liquid commodities.
“The NCDEX Agridex will finally fulfill the dream to serve benchmark
for the Indian agriculture ecosystem. It will act as a robust indicator of the
broader market and its strong surveillance will give enough confidence to the
traders,” said Kapil Dev, executive vice-president, of the NCDEX. For indices,
the NCDEX has partnered with NSE Indices, a leading index service provider, as
a third party, to maintain and disseminate real-time NCDEX Agridex values.
Leading commodities such as guar seed, guar gum, soybean, chana,
mustard seed, and jeera, etc, will be the index’s constituents. These contracts
will be cash-settled, in accordance with the regulator’s guidelines.
“NSE Indices is a leading index player in the capital markets, and
this is one more engagement through which we have demonstrated our strengths in
the indexing space,” said Mukesh Agarwal, chief executive officer of NSE
Indices.
These index futures contracts will not only provide the opportunity to
hedgers to hedge their position in a more dynamic way, but will also provide
unique trading and arbitrage opportunities to market participants. As the index
represents a diverse basket of commodities, it is less risky and more
predictable, compared to individual commodities. Futures trading on Agridex
will also enhance overall liquidity on the exchange platform.
Source: https://www.business-standard.com