9th Annual Commodities Research Magazine (For private circulation only) MMODITY O U T L O O K SPICE UP YOUR RETURNS WITH COMMODITY TRADE

Transcription

1 9th Annual Commodities Research Magazine (For private circulation only) C MMODITY O U T L O O K SPICE UP YOUR RETURNS WITH COMMODITY TRADE

2 PROPERTY CONSULTANT OF THE YEAR (RESIDENTIAL) BROKING - EQUITY, COMMODITY, CURRENCY WEALTH MANAGEMENT INVESTMENT BANKING INSURANCE BROKING REAL ESTATE ADVISORY DISTRIBUTION OF IPOs, MF, FDs, BONDS FINANCING INSTITUTIONAL BROKING CLEARING SERVICES NRI & FPI SERVICES DEPOSITORY SERVICES RESEARCH ALTERNATIVE INVESTMENT FUND MORTGAGE ADVISORY DELHI MUMBAI KOLKATA AHMEDABAD CHENNAI BENGALURU DUBAI NEW YORK ATLANTA ORLANDO

3 Content COMMODITY OUTLOOK 2017 Page No. 1. Performance of 2016 & Events 4 2. Commodity performance Asset class comparison Span of price movement 7 5. Fundamental calls performance in Economic indicators Outlook 2017 i. Bullions ii. Energy iii. Base metals iv. Oilseeds & edible oil v. Spices vi. Other Commodities SMC RESEARCH TEAM REGISTERED OFFICES: 11 / 6B, Shanti Chamber, Pusa Road, New Delhi Tel: , Fax: MUMBAI OFFICE: Dheeraj Sagar, 1st Floor, Opp. Goregaon sports Club, Link Road Malad (West), Mumbai Tel: , Fax: KOLKATA OFFICE: 18,Rabindra Sarani, Poddar Court, Gate No-4,5th Floor, Kolkata Tel : Fax No : AHMEDABAD OFFICE : 10/A, 4th Floor, Kalapurnam Building, Near Municipal Market, C G Road, Ahmedabad , Gujarat Tel : , CHENNAI OFFICE: Salzburg Square, Flat No.1, III rd Floor, Door No.107, Harrington Road, Chetpet, Chennai Tel: , Fax SECUNDERABAD OFFICE: 206, 3rd Floor, above CMR Exclusive, Bhuvana Towers, S.D.Road, Secunderabad Tel: /99, DUBAI OFFICE: 312, Belshalat Building, Al Karama, Dubai, P.O. Box , U.A.E. Tel: , Mobile : Fax : ID : pankaj@smccomex.com smcdmcc@gmail.com NEW YORK OFFICE: 3Alliance Bernstein Building 1345 Avenue of the Americas Second Floor New York, NY Phone: (212) , Toll-Free: (855) , Fax: (866) Printed and Published on behalf of SMC Comtrade Ltd. 11/6B, Shanti Chamber, Pusa Road, New Delhi Website: Investor Grievance : smc@smcindiaonline.com Printed at: S&S MARKETING T o the surprise of many, commodities have made an impressive comeback in the year 2016 after sinking continuously for 5 years on supply glut situations accompanied by dull demand across the globe. CRB which touched the high of in 2008 saw the downside of 155 in 2016 and rebounded towards the level of ; the rebalancing act gave a much needed support to the commodities. The oversupply of commodities that was induced by high prices in the first decade of this century is finally being balanced in 2016 to large extent and the development is likely to prolong in 2017 as well. In last annual magazine, we had mentioned that the year 2015 was for the Year of Reality and 2016 for the Year of Effort. Fiscal stimulus by China, production cut by OPEC, Russia and other countries, action pack performance by India and other countries exceeded the expectation of demand. Events, be it defining or non defining gave enough opportunities to the commodity market to perform. Brexit and delay in interest rate hike by Fed augmented bullion prices as political uncertainty encouraged nervous investors to take refuge in diversifying 'safe haven' assets, OPEC production cut reignited energy counter, Trump clear victory gave positive waves to the industrial commodities amid many mines closure activities and fiscal stimulus by China. Apart from improvement in physical demand and supply rebalancing, it was investment demand, which gave extra power to the commodities. Till Nov, 2016, index-fund and exchange-traded-fund commodity inflows stood at $41.7 billion, putting the year-to-date total well ahead of $14 billion for 2015 and net redemption of $24 billion in Going forward, OPEC production cut is positive development for the oil world and it will remove more than 1 million barrels per day from an oversupplied system. If crude prices cross $60 mark, then U.S. shale producers may ramp up their production. If it happens then upside will be capped in the energy counter in Additionally, OPEC's production cuts could be a short term in nature, if history repeats. During the past 20 years, trough production levels have lasted no more than a year. Agri commodities are forecast to rise modestly as a decline in grains prices is expected to offset a rise in prices for other commodities. Moreover, larger than expected increases in energy prices, a key cost component in agriculture, could push food prices even higher than forecast. Bullion complex is expected to give average performance in the year 2017 as appetite for safe-haven buying ebbs with rising interest rates. Renewed focus on infrastructure may give further leg to the industrial metals prices, though stability at the higher side will depend upon the actual performance by China and other economies. Despite the fact that uncertainty is likely dominate the global economy in 2017; commodities should continue to perform well. We believe that improving leading economic indicators and strong seasonality could extend the strength in commodity but at the same time similar performance of commodities in 2016 is unexpected in US policies under Trump regime will be another focus for the entire world in We expect the rebalancing of the commodities market could be achieved by the second half of Furthermore, progression of the commodity cycle, from oversupply to equilibrium to deficit; will likely drive commodity prices higher over the next several years. If we talk out Indian economy, it has reportedly overtaken the United Kingdom's for the first time in over 100 years, now standing as the world's sixth largest economy by GDP after the United States, China, Japan, Germany, and France. Hence, future is bright with current aggression to achieve overall growth. As regards, commodity future market, many steps to curb the volatility and to strengthen the system may increase the confidence of the market and in the year 2017, the dream of option trading in Indian Commodity Exchanges in going to be true, which can open the door of opportunities for the participants. Happy Investing in Commodities 102, Mahavirji Complex LSC-3, Rishabh Vihar, New Delhi (India) Ph.: , , ss@sandsmarketing.in (Vandana Bharti) SMC Global Securities Ltd. (hereinafter referred to as SMC ) is regulated by the Securities and Exchange Board of India ( SEBI ) and is licensed to carry on the business of broking, depository services and related activities. SMC is a registered member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited, MSEI (Metropolitan Stock Exchange of India Ltd.) and M/s SMC Comtrade Ltd is a registered member of National Commodity and Derivative Exchange Limited and Multi Commodity Exchanges of India and other commodity exchanges in India. SMC is also registered as a Depository Participant with CDSL and NSDL. SMC s other associates are registered as Merchant Bankers, Portfolio Managers, NBFC with SEBI and Reserve Bank of India. It also has registration with AMFI as a Mutual Fund Distributor. SMC is a SEBI registered Research Analyst having registration number INH SMC or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities/commodities market. The views expressed by the Research Analyst in this Report are based solely on information available publicly available/internal data/ other reliable sources believed to be true. SMC does not represent/ provide any warranty expressly or impliedly to the accuracy, contents or views expressed herein and investors are advised to independently evaluate the market conditions/risks involved before making any investment decision. The research analysts who have prepared this Report hereby certify that the views /opinions expressed in this Report are their personal independent views/opinions in respect of the subject commodity. Disclaimer: This Research Report is for the personal information of the authorized recipient and doesn't construe to be any investment, legal or taxation advice to the investor. It is only for private circulation and use. The Research Report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. No action is solicited on the basis of the contents of this Research Report. The Research Report should not be reproduced or redistributed to any other person(s)in any form without prior written permission of the SMC. The contents of this material are general and are neither comprehensive nor inclusive. Neither SMC nor any of its affiliates, associates, representatives, directors or employees shall be responsible for any loss or damage that may arise to any person due to any action taken on the basis of this Research Report. It does not constitute personal recommendations or take into account the particular investment objectives, financial situations or needs of an individual client or a corporate/s or any entity/s. All investments involve risk and past performance doesn't guarantee future results. The value of, and income from investments may vary because of the changes in the macro and micro factors given at a certain period of time. The person should use his/her own judgment while taking investment decisions. Please note that SMC its affiliates, Research Analyst, officers, directors, and employees, including persons involved in the preparation or issuance if this Research Report: (a) from time to time, may have long or short positions in, and buy or sell the commodity thereof, mentioned here in or (b) be engaged in any other transaction involving such commodities and earn brokerage or other compensation or act as a market maker in the commodities discussed herein(c) may have any other potential conflict of interest with respect to any recommendation and related information and opinions. All disputes shall be subject to the exclusive jurisdiction of Delhi High court. All disputes shall be subject to the exclusive jurisdiction of Delhi High court.

4 Performance & Events COMMODITY OUTLOOK 2017 Commodity * Up to 30th December 2016 Performance of Calls Given In Our Annual Magazine Commodity Outlook 2016 Range forecasted (Annual Magz. '16) Low* High* Gold (COMEX) Gold (MCX) Silver(COMEX) Silver(MCX) Crude Oil (NYMEX) Crude Oil (MCX) Natural gas(nymex) Natural gas (MCX) Aluminium (MCX) Aluminium (LME) Copper (MCX) Copper (LME) Lead (MCX) Lead (LME) Nickel (MCX) Nickel (LME) Zinc (MCX) Zinc (LME) Cardamom Coriander Jeera Turmeric Kapas Sugar Wheat CPO (MCX) Ref. Soy oil RM Seed Soybean (NCDEX) Soybean (CBOT) Source: SMC Research FOMC & ECB Meeting Schedule For 2017 Months 2017 FOMC meeting ECB meeting January 31st 11th and 19th February 1st 1st & 15th March 14th and 15th 9th & 22th April - 5th May 2nd and 3rd 3rd & 17th June 13th and 14th 8th & 21st July 25th and 26th 5th and 22nd August - 2nd September 19th and 20th 7th & 20th October 31st 4th & 26th November 1st 22nd December 12th and 13th 6th & 14th Source: FOMC & ECB WGC Gold holdings(top 10 Countries) Country Tonnes % of reserves United States 8, % Germany 3, % Italy 2, % France 2, % China 1, % Russia 1, % Switzerland 1, % Japan % Netherlands % India % Source: WGC World Interest Rates Of Key Central Banks at present Central Banks Country Current Interest Rates Previous rate Date of change Federal Reserve(FED) US 0.75% 0.50% 14-Dec-16 European Central Bank(ECB) Euro 0.00% 0.05% 10-Mar-16 Bank of England(BOE) England 0.25% 0.50% 4-Aug-16 Bank of Japan(BOJ) Japan 0.00% 0.10% 1-Feb-16 Reserve Bank of India(RBI) India 6.25% 6.50% 4-Oct-16 People Bank of China(PBOC) China 4.35% 4.60% 23-Oct-15 Reserve Bank of Australia(RBA) Australia 1.50% 1.75% 8-Aug-16 Brazil Central Bank(BACEN) Brazil 14.00% 14.25% 19-Oct-16 4 Source: FX Street

5 Commodity Performance COMMODITY OUTLOOK 2017 Return of Agri Commodities from 1st Jan '16 till 30th Dec '16 %change Return of Bullion, Base Metal and Energy from 1st Jan '16 till 30th Dec'16 % Change Natural Gas (MCX) Crude oil (MCX) Copper (MCX) Copper (LME) Silver (MCX) Aluminium (MCX) Lead (MCX) Lead (LME) Aluminium (LME) Gold (MCX)

6 Asset Classes Comparison COMMODITY OUTLOOK 2017 Asset class performance from 1st Jan'16 to 30th Dec ' ** Closing as on 30th December, 2016 The year 2016 was an eventful year; Brexit, Trump Bump, OPEC production cut and what not? All these events kept the investors on toes throughout the year due to high volatility. The year 2016 has started on a bearish note, with fall in equity, worries about China s economy and slugging commodities prices. Brent slipped below $30 for the first time in more than a decade. However, in the first quarter of the CY 2016, market saw considerable upside. Crude prices got doubled from the 13 year low, touched the high of $ In a historic decision, OPEC countries agreed to cut 1.2 million barrels per day (bpd) by January to rebalance the market. Even Russia assured for production cut and gradually more non OPEC countries gave the consensus for the same and the same reignited oil prices. Markets responded sharply to the Brexit vote, concerns about the future of euro and victory of Donald Trump in US election. With high volatility, we saw inflow in both riskier asset as well as safe haven buying in bullion and dollar index. It was a fabulous year for dollar index, which saw high of as confidence returned in US economy. Gold and silver were the hot favourite among investors with record in flow in investment demand. It gave more than 30% return in 2016, though shed its yearly gain after the victory of Trump in US, which fueled confidence in industrial metals with his statement that he would invest $1 trillion in infrastructure over a 10-year period and would go for tax cut to revive the economic activities. Capital outflow witnessed in the last quarter of 2016 in gold because of higher side in dollar index, improved economic data, interest rate hike by Fed amid demonetization in India, which hurt the physical demand. Even silver ignored the upside of base metals and followed the footsteps of gold in the last quarter. In base metals, zinc and lead hypnotized the market players with its magical jump in the prices. Market thrilled with the upside in zinc owing to closure of mines amid improved demand, it gave more than 75% return in Many agri commodities demonstrated their strength while some of them performed silently on record production amid lack of export demand. Sugar, wheat, some spices, some oil seeds and edible oil prices spiraled on demand supply mismatch. With reference to the performance of Asian equity market, China and Hong Kong disappointed investors whereas India gave average return and Japan surprised the world with its more than 9% return in The dragon economy look tired in 2016, nothing encouraged it to get up and run. The Shanghai Composite has fallen 12% in 2016, poised for its biggest annual loss in five years, while the yuan is heading for its worst year since Concern about the pace of a depreciating currency is fueling capital outflows, while government efforts to curb asset bubbles have spurred turmoil in the debt market and conjured fears of company defaults. Even Hang Sang has some spillover effect and closed in red. There was no relief for euro and after the event of Brexit, it fell like nine pin and gave negative return of around 3%. Nifty was just few points away from 9000 level on optimistic sentiments in economy and in the world for India though it shed majority of its yearly gain in last four month. Good monsoon also supported the higher side. Commodity based economy Brazil gave the handsome return with rise in commodities prices. Its leading index Bovespa gave more than 38% return in A big contributor to performance of this year, in dollar terms, is the strength of the Brazilian real (BRL), which is stronger by 18% against the dollar this year. Trump Bump buoyed sentiment among investors and Dow Jones touched the magical marks. Improvement in economic activities and some rise in inflation amid gigantic rise in dollar index had already made the base for rally in US equity. Even European indices CAC, DAX etc gave positive return last year

7 Span Of Price Movement COMMODITY OUTLOOK 2017 Span of Price Movement (Agro Commodities) COMMODITY LIFE TIME HIGH LIFE TIME LOW 2016 HIGH 2016 LOW Cardamom Coriander Jeera Turmeric OTHER COMMODITIES Barley Cotton oilseed cake Cotton (MCX) Guar Seed Guar Gum Kapas Maize Mentha Oil (MCX) Sugar Wheat OILSEEDS Crude Palm Oil Crude Palm Oil (BMD) Soybean Soybean (CBOT) RM Seed Ref. Soy Oil (NCDEX) * Closing till 30th December 2016 Span of Price Movement (Bullions, Metals & Energy) COMMODITY EXCHANGE LIFE TIME HIGH LIFE TIME LOW 2016 HIGH* 2016 LOW* Gold COMEX MCX Silver COMEX MCX Crude Oil NYMEX MCX Natural Gas NYMEX MCX Aluminium MCX Copper MCX Lead MCX Nickel MCX Zinc MCX * Closing till 30th December

8 Performance of Fundamental calls COMMODITY OUTLOOK 2017 Performance of Metals And Energy Fundamental Calls (January - December) 2016 Sl. Date Commodity Contract Trend Call Initiated Targets Stop Loss Remarks Price movement since No. Given Price call Is initiated (%) 1 7-Jan Gold Feb Buy Booked partial profit at Jan Zinc Feb Buy Booked partial profit at Feb Crude oil March Sell Booked full profit at Feb Zinc Feb Sell Booked partial profit at Feb Gold April Buy Booked full profit at Feb Lead Feb Buy Booked partial profit at Feb Gold April Buy Booked partial profit at Feb Crude oil March Buy Booked partial profit at Feb Gold April Buy Booked partial profit at Feb Gold April Buy Booked full profit at Feb Gold April Sell Booked full at Mar Gold April Sell Booked profit at Mar Zinc March Sell Exit at Mar Zinc March Buy Exit at Mar Silver May Buy Stop loss hit Mar Copper Mini April Buy Exit at Apr Aluminum MiniApril Buy Booked full profit at Apr Nickel Mini April Buy Booked full profit at Apr Lead Mini April Buy Booked partial profit at Apr Copper Mini June Sell Booked partial profit at Apr Natural gas May Sell Booked profit at Apr Natural gas May Buy Booked profit at May Aluminum Mini May Sell Booked partial profit at May Copper Mini June Sell Exit at May Natural gas June Sell Booked partial profit at May Aluminum Mini May Buy Booked partial profit at May Lead Mini June Buy Booked partial profit at Jun Natural gas June Buy Booked full profit at Jun Silver Mini June Buy Booked full profit at Jun Crude oil Mini July Sell Booked full profit at Jun Natural gas June Buy Booked partial profit at Jun Nickel June Buy Booked full profit at Jun Natural gas June Buy Booked partial profit at Jun Natural gas June Buy Booked full profit at Jun Nickel June Buy Booked partial profit at Jun Natural gas July Buy Booked full profit at Jun Lead July Buy Booked partial profit at Jun Natural gas July Sell Booked partial profit at Jul Natural gas July Sell Booked partial profit at Jul Natural gas July Buy Booked partial profit at Jul Natural gas July Sell Booked partial profit at Jul Natural gas July Sell Exit at Jul Zinc Mini July Buy Booked partial profit at Jul Nickel July Buy Booked full profit at Note: These fundamental calls are for duration of one week time frame and do not confuse these with intraday calls. It is assumed that investor takes position in two lots and square off position in one lot on partial profit booking and trail stop loss to buying/selling price for second lot. 8

9 Performance of Fundamental calls COMMODITY OUTLOOK 2017 Sl. Date Commodity Contract Trend Call Initiated Targets Stop Loss Remarks Price movement since No. Given Price call Is initiated (%) Jul Lead Aug Buy Booked partial profit at Jul Aluminum July Sell Booked partial profit at Jul Zinc Aug Sell Booked partial profit at Jul Silver Mini Aug Buy Booked partial profit at Jul Aluminum Aug Buy Booked partial profit at Aug Natural gas Aug Buy Exit at Aug Zinc Aug Sell Booked partial profit at Aug Lead Aug Buy Booked partial profit at Aug Zinc Aug Sell Exit at Aug Copper Aug Sell Booked partial profit at Aug Gold Oct Sell Booked partial profit at Aug Gold Oct Sell Booked partial profit at Aug Crude oil Sep Sell Booked partial profit at Aug Nickel Sep Sell Booked partial profit at Sep Zinc Mini Sep Sell Exit at Sep Natural gas Sep Sell Exit at Sep Gold Oct Buy Booked partial profit at Sep Aluminum Oct Buy Booked full profit at Sep Lead Sep Buy Booked full profit at Sep Zinc Oct Sell Booked partial profit at Sep Zinc Mini Oct Buy Stop loss hit Oct Silver Mini Nov Sell Booked partial profit at Oct Nickel Oct Buy Booked partial profit at Oct Lead Oct Buy Booked partial profit at Oct Lead Oct Sell Booked partial profit at Oct Copper Oct Sell Booked partial profit at Oct Aluminum Oct Sell Booked partial profit at Oct Aluminum Oct Sell Booked partial profit at Oct Lead Oct Buy Booked partial profit at Oct Silver Mini Nov Buy Booked partial profit at Nov Lead Nov Sell Stop loss hit Nov Lead Nov Buy Booked partial profit at Nov Aluminum Nov Sell Stop loss hit Nov Gold Dec Buy Stop loss hit Nov Crude oil Dec Buy Booked partial profit at Nov Silver Dec Sell Booked partial profit at Nov Copper Nov Buy Exit at Nov Aluminum Nov Buy Booked partial profit at Nov Aluminum Nov Buy Booked partial profit at Nov Copper Nov Buy Booked partial profit at Nov Silver Dec Buy Stop loss hit Net % price movement Total calls 85 Profitable 68 Stop loss 16 Strike rate 81% Note: These fundamental calls are for duration of one week time frame and do not confuse these with intraday calls. It is assumed that investor takes position in two lots and square off position in one lot on partial profit booking and trail stop loss to buying/selling price for second lot. 9

10 Performance of Fundamental calls COMMODITY OUTLOOK 2017 Performance of Agri Commodities Fundamental Calls (January - December) 2016 Sl. Date Commodity Contract Trend Call Initiated Targets Stop Loss Remarks Price movement since No. Given Price call Is initiated (%) 1 1-Jan-16 Cardamom Feb Buy Exit at Jan-16 Ref. Soy oil Feb Sell Exit at Jan-16 Sugar March Sell Full profit booked at Jan-16 Cocud March Sell Full profit booked at Jan-16 Kapas April Sell Full profit booked at Feb-16 Cocud March Sell Exit at Feb-16 Sugar March Sell Exit at Feb-16 Corainder April Buy Full profit booked at Feb-16 RM Seed April Buy Partial profit booked at Feb-16 Kapas April Buy Exit at Feb-16 Soybean March Buy Exit at Feb-16 CPO March Sell Full profit booked at Feb-16 CPO March Sell Partial profit booked at Feb-16 Mentha Oil March Sell Full profit booked at Feb-16 Ref. soy oil March Sell Full profit booked at Mar-16 CPO March Sell Partial profit booked at Mar-16 Soybean April Sell Partial profit booked at Mar-16 CPO April Sell Exit at Mar-16 Turmeric April Buy Partial profit booked at Mar-16 Wheat April Buy Partial profit booked at Mar-16 Turmeric April Buy Full profit booked at Mar-16 Cardamom April Buy Full profit booked at Mar-16 RM Seed May Buy Full profit booked at Apr-16 CPO May Buy Exit at Apr-16 Sugar May Sell Partial profit booked at Apr-16 Sugar July Sell Partial profit booked at Apr-16 RM Seed May Buy Exit at Apr-16 CPO May Sell Full profit booked at Apr-16 Cocud June Sell Exit at Apr-16 Mentha Oil May Buy Full profit booked at Apr-16 Guargum May Buy Full profit booked at Apr-16 Sugar May Sell Full profit booked at Apr-16 Guargum May Buy Exit at Apr-16 Ref. Soy oil May Sell Full profit booked at May-16 RM Seed June Sell Partial profit booked at May-16 Barley June Sell Partial profit booked at May-16 Mentha Oil May Sell Partial profit booked at May-16 Maize June Buy Partial profit booked at May-16 Cardamom June Sell Full profit booked at May-16 Cardamom June Sell Full profit booked at Jun-16 Ref. Soy oil July Buy Partial profit booked at Jun-16 Mustard July Buy Full profit booked at Note: These fundamental calls are for duration of one week time frame and do not confuse these with intraday calls. It is assumed that investor takes position in two lots and square off position in one lot on partial profit booking and trail stop loss to buying/selling price for second lot. 10

11 Performance of Fundamental calls COMMODITY OUTLOOK 2017 Sl. Date Commodity Contract Trend Call Initiated Targets Stop Loss Remarks Price movement since No. Given Price call Is initiated (%) 43 7-Jun-16 Mustard July Buy Full profit booked at Jun-16 Cardamom July Sell Exit at Jun-16 Mustard July Buy Full profit booked at Jun-16 CPO July Sell Full profit booked at Jun-16 Ref. Soy oil July Sell Partial profit booked at Jun-16 CPO July Sell Full profit booked at Jul-16 Ref. Soy oil Aug Buy Exit at Jul-16 Cardamom Aug Sell Partial profit booked at Jul-16 Ref. Soy oil Aug Sell Full profit booked at Jul-16 Mustard Aug Sell Exit at Jul-16 Sugar Oct Sell Exit at Jul-16 Kapas April Buy Full profit booked at Jul-16 Mustard Aug Buy Partial profit booked at Jul-16 Kapas April Buy Full profit booked at Jul-16 Soybean Oct Sell Full profit booked at Jul-16 Soybean Oct Sell Partial profit booked at Jul-16 CPO Aug Buy Partial profit booked at Jul-16 Mustard Aug Buy Partial profit booked at Jul-16 Cardamom Aug Buy Full profit booked at Jul-16 Cardamom Aug Buy Partial profit booked at Jul-16 CPO Aug Buy Exit at Jul-16 Barley Aug Buy Exit at Jul-16 Mustard Aug Sell Exit at Jul-16 Mentha Oil Aug Buy Partial profit booked at Jul-16 Kapas April Sell Exit at Jul-16 Mustard Aug Sell Partial profit booked at Jul-16 Mentha Oil Aug Sell Partial profit booked at Jul-16 Sugar Oct Sell Partial profit booked at Jul-16 Cardamom Sept Buy Partial profit booked at Jul-16 Soybean Oct Sell Partial profit booked at Jul-16 Turmeric Aug Buy Partial profit booked at Aug-16 Cardamom Sept Buy Partial profit booked at Aug-16 Kapas April Sell Full profit booked at Aug-16 Ref. Soy oil Sept Buy Partial profit booked at Aug-16 Turmeric Sept Buy Exit at Aug-16 Cardamom Sept Buy Full profit booked at Aug-16 Mentha Oil Sept Sell Partial profit booked at Aug-16 Mustard Sept Sell Exit at Aug-16 Ref. Soy oil Sept Buy Full profit booked at Aug-16 Mustard Sept Sell Partial profit booked at Aug-16 Kapas April Sell Partial profit booked at Sep-16 Cardamom Oct Sell Full profit booked at Sep-16 Cardamom Oct Sell Partial profit booked at Sep-16 Mentha Oil Sept Buy Exit at Sep-16 Kapas April Buy Partial profit booked at Sep-16 Kapas April Buy Partial profit booked at Note: These fundamental calls are for duration of one week time frame and do not confuse these with intraday calls. It is assumed that investor takes position in two lots and square off position in one lot on partial profit booking and trail stop loss to buying/selling price for second lot. 11

12 Performance of Fundamental calls COMMODITY OUTLOOK 2017 Sl. Date Commodity Contract Trend Call Initiated Targets Stop Loss Remarks Price movement since No. Given Price call Is initiated (%) Sep-16 CPO Sept Sell Partial profit booked at Sep-16 CPO Sept Buy Partial profit booked at Sep-16 CPO Sept Buy Exit at Sep-16 Cardamom Oct Sell Partial profit booked at Sep-16 Soybean Nov Sell Partial profit booked at Sep-16 CPO Oct Sell Partial profit booked at Oct-16 Mentha Oil Oct Sell Partial profit booked at Oct-16 CPO Oct Sell Full profit booked at Oct-16 Ref. Soy oil Nov Sell Partial profit booked at Oct-16 Cardamom Oct Sell Exit at Oct-16 Jeera Nov Sell Partial profit booked at Oct-16 Soybean Nov Sell Partial profit booked at Oct-16 Wheat Nov Buy Full profit booked at Oct-16 Kapas April Buy Partial profit booked at Nov-16 CPO Nov Sell Partial profit booked at Nov-16 Maize Kharif Dec Sell Exit at Nov-16 Kapas April Buy Exit at Nov-16 CPO Nov Buy Partial profit booked at Nov-16 Soybean Dec Sell Partial profit booked at Nov-16 Cocud Nov Buy Full profit booked at Nov-16 Kapas April Buy Full profit booked at Nov-16 Kapas April Buy Partial profit booked at Nov-16 Kapas April Sell Partial profit booked at Nov-16 Cardamom Dec Sell Exit at Nov-16 Mentha Oil Dec Sell Exit at Nov-16 Ref. Soy oil Dec Buy Full profit at Nov-16 Soybean Dec Buy Exit at Dec-16 Kapas April Buy Exit at Dec-16 Ref. Soy oil Jan Sell Partial profit booked at Dec-16 Guar gum Jan Sell Partial profit booked at Dec-16 Ref. Soy oil Jan Sell Partial profit booked at Dec-16 Ref. Soy oil Jan Sell Exit at Dec-16 CPO Jan Sell Partial profit booked at Dec-16 Maize Kharif Jan Sell Partial profit booked at Dec-16 CPO Jan Sell Exit at Dec-16 Coriander Jan Sell Full profit booked at Dec-16 Maize Kharif Jan Sell Partial profit booked at Dec-16 Guar gum Jan Sell Partial profit booked at Dec-16 Guar seed Jan Sell Partial profit booked at Dec-16 Guar gum Jan Sell Partial profit booked at Net % Price movement Total calls 128 Profitable 96 Stop loss 32 Strike rate 75% Note: These fundamental calls are for duration of one week time frame and do not confuse these with intraday calls. It is assumed that investor takes position in two lots and square off position in one lot on partial profit booking and trail stop loss to buying/selling price for second lot. 12

13 Economic Indicators COMMODITY OUTLOOK 2017 India Inflation % change Existing Home Sales -U.S in absolute numbers Jan-08 1-Apr-08 1-Jul-08 1-Oct-08 1-Jan-09 1-Apr-09 1-Jul-09 1-Oct-09 1-Jan-10 1-Apr-10 1-Jul-10 1-Oct-10 1-Jan-11 1-Apr-11 1-Jul-11 1-Oct-11 1-Jan-12 1-Apr-12 1-Jul-12 1-Oct-12 1-Jan-13 1-Apr-13 1-Jul-13 1-Oct-13 1-Jan-14 1-Apr-14 1-Jul-14 1-Oct-14 1-Jan-15 1-Apr-15 1-Jul-15 1-Oct-15 1-Jan-16 1-Apr-16 1-Jul-16 1-Oct-16 1-Jan-08 1-Apr-08 1-Jul-08 1-Oct-08 1-Jan-09 1-Apr-09 1-Jul-09 1-Oct-09 1-Jan-10 1-Apr-10 1-Jul-10 1-Oct-10 1-Jan-11 1-Apr-11 1-Jul-11 1-Oct-11 1-Jan-12 1-Apr-12 1-Jul-12 1-Oct-12 1-Jan-13 1-Apr-13 1-Jul-13 1-Oct-13 1-Jan-14 1-Apr-14 1-Jul-14 1-Oct-14 1-Jan-15 1-Apr-15 1-Jul-15 1-Oct-15 1-Jan-16 1-Apr-16 1-Jul-16 1-Oct-16 Industrial Production YoY -U.S Non Farm Payroll -U.S % change in numbers Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 U.S Unemployment Rate % change Consumer Confidence Index -U.S in absolute values Jan-08 1-Apr-08 1-Jul-08 1-Oct-08 1-Jan-09 1-Apr-09 1-Jul-09 1-Oct-09 1-Jan-10 1-Apr-10 1-Jul-10 1-Oct-10 1-Jan-11 1-Apr-11 1-Jul-11 1-Oct-11 1-Jan-12 1-Apr-12 1-Jul-12 1-Oct-12 1-Jan-13 1-Apr-13 1-Jul-13 1-Oct-13 1-Jan-14 1-Apr-14 1-Jul-14 1-Oct-14 1-Jan-15 1-Apr-15 1-Jul-15 1-Oct-15 1-Jan-16 1-Apr-16 1-Jul-16 1-Oct-16 1-Jan-08 1-Apr-08 1-Jul-08 1-Oct-08 1-Jan-09 1-Apr-09 1-Jul-09 1-Oct-09 1-Jan-10 1-Apr-10 1-Jul-10 1-Oct-10 1-Jan-11 1-Apr-11 1-Jul-11 1-Oct-11 1-Jan-12 1-Apr-12 1-Jul-12 1-Oct-12 1-Jan-13 1-Apr-13 1-Jul-13 1-Oct-13 1-Jan-14 1-Jan-08 1-Apr-08 1-Jul-08 1-Oct-08 1-Jan-09 1-Apr-09 1-Jul-09 1-Oct-09 1-Jan-10 1-Apr-10 1-Jul-10 1-Oct-10 1-Jan-11 1-Apr-11 1-Jul-11 1-Oct-11 1-Jan-12 1-Apr-14 1-Jul-14 1-Oct-14 1-Jan-15 1-Apr-15 1-Jul-15 1-Oct-15 1-Jan-16 1-Apr-16 1-Jul-16 1-Oct-16 1-Apr-12-1-Jul-12 1-Oct-12 1-Jan-13 1-Apr-13 1-Jul-13 1-Oct-13 1-Jan-14 1-Apr-14 1-Jul-14 1-Oct-14 1-Jan-15 1-Apr-15 1-Jul-15 1-Oct-15 1-Jan-16 1-Apr-16 1-Jul-16 1-Oct-16 13

14 14 India GDP (YoY)% Change Purchase Manager Index (Absolute Values) China GDP (YoY)% Change 1-Dec-10 1-Jun-11 US GDP (YoY)% Change 1-Sep-16 1-Jun-16 1-Mar-16 1-Dec-15 1-Sep-15 1-Jun-15 1-Mar-15 1-Dec-14 1-Sep-14 1-Jun-14 1-Mar-14 1-Dec-13 1-Sep-13 1-Jun-13 1-Mar-13 1-Dec-12 1-Sep-12 1-Jun-12 1-Mar-12 1-Dec-11 1-Sep-11 1-Nov Jul-16 1-Mar-16 1-Nov Jul-15 1-Mar-15 1-Nov Jul-14 1-Mar-14 1-Nov Jul-13 1-Mar-13 1-Nov Jul-12 1-Mar-12 1-Nov Jul-11 1-Mar-11 1-Nov Jul-10 1-Mar-10 1-Nov Jul-09 1-Mar-09 U.S Inflation Rate 1-Mar Jun Sep-10 GDP - India & China (YoY) 1-Mar Dec Jun Sep Jul Nov Mar Mar Dec Jun-08 1-Sep-16 1-May-16 1-Jan-16 1-Sep-15 1-May-15 1-Jan-15 1-Sep-14 1-May-14 1-Jan-14 1-Sep-13 1-May-13 1-Jan-13 1-Sep-12 1-May-12 1-Jan-12 1-Sep-11 1-May-11 1-Jan-11 1-Sep-10 1-May-10 1-Jan-10 1-Sep-09 1-May-09 1-Jan-09 1-Sep Sep-08 1-Jan-08 1-May Mar-08 1-Jun-16 1-Sep-16 1-Sep-15 1-Dec-15 1-Mar-16 1-Mar-15 1-Jun-15 1-Sep-14 1-Dec-14 1-Mar-14 1-Jun-14 1-Sep-13 1-Dec-13 1-Mar-13 1-Jun-13 1-Sep-12 1-Dec-12 1-Mar-12 1-Jun-12 1-Sep-11 1-Dec-11 1-Mar-11 1-Jun-11 1-Sep-10 1-Dec-10 1-Mar-10 1-Jun-10 1-Sep-09 1-Dec-09 1-Dec-08 1-Mar-09 1-Jun-09 1-Jun-08 1-Sep-08 1-Mar-08 Economic Indicators COMMODITY OUTLOOK 2017 Baltic Dry Index GDP - Euro Zone & US (YoY) Euro zone GDP (YoY) % Change Comparison of Purchase Manager Index - U.S & China Purchase Manager Index (Absolute Values)

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16 GOLD COMMODITY OUTLOOK 2017 Yearly price movement of Gold futures (MCX) RANGE: MCX: Rs COMEX: $ Factors to affect: US interest rate policy, Movement of greenback and global geopolitical tensions Hedge funds and SPDR funds flow Global equities performance and jewellery and coin demand Elections in many european countries Bear run in gold of three years finally ended in 2016 with huge investment demand and safe haven buying. In the first half of the year it gave heroic performance with more than 30% return, positive price moves continued beyond the Brexit vote shock in June. It made a high of $ in comex and in in mcx. Though in second half of the year, it gave up most of the gain due to fear of interest rate hike, massive upside in dollar index, Trump win and liquidation by hedge funds and ETF's outflow amid huge downside in physical demand, especially in Asian countries. Demonetization in India also dried up the physical volume in physical market despite wedding and festival season. Gold jewellery demand in India and China fell by 40% and 27% respectively has not just been about price action. Supply outpaced demand last year. According to World gold council total global gold supply stood at 3390 tones in three quarters of 2016 while total gold physical demand stood at tonnes in three quarters of There were also major developments in the gold market itself, namely the launch of five new trading projects in the London gold market, the introduction of a Shariah gold standard etc. Despite huge downside in the last quarter, gold managed to close the year on positive note, with gain of 10.16% in mcx and 8.15% in comex. The SPDR Gold ETF holdings increased to tonnes in last week of 2016 as compared to in last week of Going forward in 2017, we may see continued pressure on the gold price in the first few months of 2017 thanks to the excitement surrounding Trump's inauguration and his expected increase in government spending. Furthermore, Fed indicated aggressive rate hike in 2017, may assist dollar index towards 112 levels. If it happens it may make gold unattractive. Indian government's decision to cancel 85% of the bank notes in circulation in an effort to fight black market money and counterfeiting can affect the jewellry demand in India in 2017 also. Equity market is expected to give positive return in 2017 as well though the gain percentage may not be the same as it was in Hence inflow is expected to be more in riskier asset. Currency play will be equally important in this counter and INR is expected to march towards 70, if it happens than the downside will be limited in Indian market. As regards euro, from April 2017, the net asset purchases are intended to continue at a monthly pace of Euros 60 billion until the end of December 2017, or beyond, if necessary. It may cap the downside of Euro. On positive side, unfortunately geopolitical risk in Middle East like Syria and Iraq, Russia and Turkey is expected to continue in 2017 as well which will compel prudent investors to keep at least 55% of their asset allocation in gold. Central bank's monetary policy statements will be the key for markets, heading into If it continues to be a net buyer, than it may improve the physical buying. Good monsoon in India amid any further downside in the prices may attract physical buying in India. If currency flows become more smooth in the second half after demonetization it will increase the physical buying.elections in many european countries may increase safe haven buying in gold. In 2017, in the first half mcx gold is likely to take support between In the second half physical as well as investment demand may augment gold price towards the level of In comex it may take support near $1020 and resistance appears near $1360. Be wise, at least keep 5% of your portfolio in gold to cover any event risk. 16

17 SILVER COMMODITY OUTLOOK 2017 Yearly price movement of Silver futures (MCX) RANGE: MCX: Rs COMEX: $ Factors to affect: US interest rate policy and Movement of greenback Hedge funds and silver ETF funds flow Global silver coins and jewellery fabrication demand White metal silver, which is also known as poor man gold, ended the three year bearish momentum in 2016 as its prices recovered tracking bounce back in gold and broad based rally in base metals complex. Silver prices often follow the movement of gold and base metals as it has dual properties. Similar to gold, silver thrilled the market with its massive upside in the first half of Though, it shed its chunk of gain in second half in line with the fall in gold prices. Comex silver made a high of $ and mcx silver touched the high of in 2016 gave 12.98% and 16.92% return respectively. Silver was more volatile than gold. As regards physical performance, according to GFMS, Decline in silver physical bar and coin demand was seen in 2016 as Jewelry fabrication struggling to recover with weak demand out of Asia and a looming stock overhang. Meanwhile global solar demand was positive in 2016 driven in large by capacity expansions in China. Photo voltaic demand in the solar sector is expected to continue to be the star performer of industrial off take going forward in Silver is used more as an industrial metal. It is also used for investment purposes; it is not to the same extent as gold. Going forward, physical demand is expected to pick up again in Europe supported by last quarter decline in prices in Whereas in Asian economies demand is expected to be dull. As regards supply side according to GFMS Declining total supply is expected to be a key driver of annual deficits in the silver market going forward in Global silver mining production peaked in 2015, with 2016 production projected to total million ounces, down by 0.6% relative to Annual silver mine supply is mostly determined by lead/zinc/copper mining activity, as silver is mainly produced as a byproduct through mining of other metals. Industrial demand has historically accounted for about 50% of silver consumption, driven by growth of the electronics industry (42% of industrial demand), brazing alloys and solders (10%), traditional photography (8%), and the photovoltaic, or the PV (13%) industries. Going forward, however, industrial demand for silver is expected to recover in Furthermore, U.S. and China have consistently ranked in the top three of all countries in terms of silver demand so these countries monetary/fiscal policies along with U.S. and Chinese hedge fund activity will have a significant impact on silver prices in Already, silver futures turnover on the Shanghai Futures Exchange has been higher than that on the Chicago Mercantile Exchange for the last three years. As regards price movements, volatility is expected to be continued. It may continue to outperform gold in 2017 as well. Reason behind this is projected upside in base metals coupled with some lower level buying in gold apart from rise in physical demand. Investors may accumulate near the level of , on the upside they hold upto the leavel of it should not reach the lecel of in 2017 f. It can take support near the level of $14 and can touch the higher side of $21. Gold silver ratio: Silver has been truly outperformer as compared to gold in 2016 as indicated by gold silver ratio which decreased from 83 in first quarter of 2016 to below 68 in last quarter of Given the fact that "normal" level of 60 is average of last 20 years silver has more potential to move higher than gold in Gold Silver ratio is expected to move in the range of in