GOLD. Lamon Rutten. Joint Managing Director

Transcription

1 GOLD Lamon Rutten Joint Managing Director Bullion: is India ready for global bullion products? Dun & Bradsheet Commodities Leadership Series Mumbai, 15 September 2006

2 Gold Average Daily Turnover Daily MCX gold volumes are on average well over 3,500 crores Valu e in R s. C ro re s Apr '05 May '05 Jun '05 Jul '05 Aug '05 Sep '05 Oct '05 Nov '05 Dec '05 Jan '06 Feb '06 Mar '06 Apr '06 May '06 Jun '06 Jul '06 Aug '06

3 What is Gold? COMMODITY OR CURRENCY? "Put forth thy hand, reach at the glorious gold." William Shakespeare

4 Why Invest in Gold? 1. International currency 2. Safe commodity over time, it has retained its purchasing power 3. Carries high market liquidity 4. Portfolio diversification 5. Hedge against inflation 6. Gold responds when you need it the most.

5 RB Chainns Gold can be bought, sold or traded globally. Other reasons Performance of gold not linked to performance of any company, industry or government. Gold needs no professional manager unlike mutual funds. Gold is an asset, which is not simultaneously a liability, unlike stocks. It does not require political & social stability to survive, in fact it thrives in the worst conditions. Gold will never loose its intrinsic value.

6 MCX Gold Futures Futures

7 Gold Contracts at MCX GOLD GOLD REGULAR GOLD MINI QUOTE=10 gms LOT SIZE=1 Kg +/- Rs 100 / TICK QUOTE=10 gms LOT SIZE=100 gms +/- Rs 10 / TICK

8 Pricing Quality & purity Demat option : Transparent screen based price. Features of Gold Mini : 995 purity gold from reputable overseas suppliers (Emirates Gold, and LBMA-approved suppliers). : Hold gold in electronic form in Demat account with depositories like NSDL & CDSL No risk of storage : The gold is housed with an internationally reputable custodian. Simple process : Buying, Selling, Delivery / Demating Automated transaction :Every transaction is through the bank acct. Monthly Contracts : Contract expires every month. Delivery Option Available in Delivery Center : Compulsory Delivery. : Denominations of 100 gms. : Ahmedabad ( Additional delivery Centers-Mumbai, Delhi, Chennai).

9 Advantages to an Investor An ideal platform for systematic investment in gold. Transparent screen-based price. Option of loan against Demat gold from Banks/ Financial Institutions. Convenience of buying gold at the investor s discretion - without visiting the outlet unlike today. Assured Quality & Purity 995 fineness gold bars imported from approved overseas suppliers. Easily accessible through an existing broker who is a member of MCX.

10 Group 4 Vaulting Charges Charges Gold Silver Rs.7200/- per kg per annum or Rs.600 per month on pro rata basis for actual number of days. Vault Charges Loading and Unloading charges No loading/unloading charges for gold Rs. 3600/- for 30 kg bar per annum or Rs.300/- per month for 30 kg bar on pro rata basis on actual number of days. Rs. 5/- per 30 kg

11 This means that if you keep your 100 grams of gold for just one day, vault charges are just Rs. 2!!!

12 Gold Delivery at MCX Kgs Year '04 Year '05 Year '06 Till September 06

13 Rediff Money Specials, 27 April 2005 Tirupati is the second richest religious body in the world after the Vatican. It prepares over 100,000 meals a day for its daily 60,000 pilgrims, and is India s largest consumer of many food commodities. The temple trust has eight tonnes of jewellery lying in its lockers, and receives nearly 10 kg of gold ornaments every week from devotees. It operates a large university and other training institutes. "The commodity terminal at the temple premises is helping the authorities immensely to monitor and evaluate future prices of agro commodities," Anita S Ahella, Finance Advisor and Chief Accounts Office of the Tirumala Tirupati Devasthanam. Temple authorities also look at the futures trade in gold. An online commodity terminal at the temple complex showing the daily futures on gold makes sense to the Tirupati authorities. If the government permits it, the Tirupati temple authorities will emerge as one of the biggest online traders in gold futures in the country.

14 Launch of Gold ETF s on NYSE Volatility of Gold Gold Returns GLD Prices Logrothmic Return J-04 M-04 M-04 J-04 S-04 N-04 J-05 M-05 M-05 J-05 S-05 N-05 J-06 M-06 M-06 GLD Price on NYSE

15 Gold ETF s / Gold Futures Gold ETF Gold Futures Easily accessible and simple Secure and transparent Cost effective (ETF Trust expenses, 0.4%, + stock broker fee) No physical delivery of underlying assets required Easily accessible and simple Secure and transparent Cost effective (commodity broker fee + margin-related costs) Every contract expires with physical delivery

16 MCX gold futures offer the investor everything he may be looking for when building a position in gold. And our vast brokerage network offers easy access. Why go for something else if you can use the liquid MCX gold futures!!!

17 The most successful businessman is the man who holds on to the old just as long as it is good, and grabs the new just as soon as it is better. Robert P. Vanderpoel Thank You Lamon Rutten Joint Managing Director