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CHAPTER I
INTRODUCTION TO THE STUDY
1.1 INTRODUCTION TO THE STUDY:
Rapid economic growth in recent years with more than 6 percent GDP growth
higher incomes giving significant purchasing power to over a billion strong
population, demand for as kinds of goods and services is set to grow rapidly with
liberalization measures in place, commodity markets in India are likely to make
an overwhelming impact on the global commodity markets India corporate.
Entities are now in position to hedge their price risks in the domestic and
International Commodity Exchanges. Online trading at the three nationwide
multi-commodity futures exchanges allows domestic hedging, while some of the
established commodity specific, exchanges are gearing up to meet the needs of
the expanding market. There is no doubt that the commodities market in India are
likely to make an overwhelming impact on the global commodity markets India
corporate entities are now in a position to hedge their price risks in the domestic
and international commodity exchanges.
Online trading at the three nationalized multi commodity futures exchanges
allows domestic hedging while some of the established commodity specific
exchanges allows domestic hedging while some of the established commodity
specific exchanges are gearing up to meet the needs of the expanding market.
There is no doubt that the commodities market in India is definitely in for a big
spent offering enormous opportunities of growth to investors speculators,
arbitragers and even big corporations in manufacturing sectors

1.2 RESEARCH DESIGN:

1.2.1 Management Problem:
Management desires to be acquainted with the investors interest in commodity
investment on the scale of investors investment pattern of commodity market.

1.2.2 Research Problem:

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The statement of research problem is A Study of awareness about Commodity

Market with special Reference of Geojit BNP Paribas Financial Services Ltd.,
satara.

1.3OBJECTIVES OF THE STUDY:

1) To study the various commodities traded on commodity market
2) To know the awareness of commodity market among investors.
3) To study the investment preferences of investors for different commodities.

1.4

SCOPE OF THE STUDY:

a) Geographical scope is limited to the commodity market in satara city,
Maharashtra state.
b) Conceptual scope of the study is limited to introduction, evaluation, and
current development in the commodity market, characteristics, function, benefits,
and types of commodity market, scope of the commodity market, and limitations
of the commodity market.
c) Analytical scope of the study is confided to use statistical tools such as graphs,
tables, diagrams etc.

1.5

IMPORTANCE OF THE STUDY:

1.5.1 Importance To The Researcher:

1) The Researcher has got knowledge about commodity market.
2) The Researcher understood that in which commodity investors would like to
invest more.
3) The researcher comes to know the awareness of investors regarding different
commodities.

1.5.2 Importance To The Organization:

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a) Organization can get information regarding criteria of Investor in Investment

and organization would be able get investors interest while investing in
various commodities, also the preferences for different commodities.

1.6

RESEARCH METHODOLOGY:

1.6.1 Data Required:

The data required for the study is demographic factors like age, income,
occupation, no. of dependents, investment pattern and customers view regarding
commodity investment and their investment in various commodities required data
is a collected from following sources.

1.6.2 Data Sources:

Researcher has used the following data sources for the study:
1) Primary Data:
The required information has been collected with the help of interview
schedule. For this purpose researcher has used structured schedule which
contain a set of questions. Researcher has taken interview of number of
investors with the help of schedule.
2) Secondary Data:
Secondary data has been collected from the References Books, Periodicals,
Unpublished sources like Research Paper, Magazines, T.V and Internet.

1.6.3 Instruments:
The researcher has collect information from the structured schedule. structured
schedule has preferred to collect the required information. The researcher has to
analyze the data by using Tables, Graphs Diagrams and other Statistical
Instruments.

1.6.4 Sampling:
As the population is infinite the researcher has selecte 55 samples are selected on
the basis of Non Probability Convenience Sampling Technique.

1.6.5 Data Analysis:

The researcher has analyzed the data by using tables and graphs and statistical
Instrument, Ms- Excel etc.

1.7

CHAPTERIZATION:
1) Chapter 1 Introduction to the study:
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This chapter includes the introductory part, objectives, scope and limitation
and it also included important of the study, research methodology used by the
researcher for this project.
2) Chapter 2 Profile of the organization:
This chapter indicates the introduction of the organization, financial position,
its subsidiaries and association, organizational structure, history of the
company.
3) Chapter 3 Conceptual Framework
This chapter defined the conceptual background which is related with project
and the research work.
4) Chapter 4 Analysis and Data InterpretationThis chapter summarizes analyzed data and interpretation of data by using
Tables, Graphs, Diagrams and other Statistical Tools.
5) Chapter 5 Findings and SuggestionsThis chapter includes the conclusions drawn by researcher based on analyzed
data and further researcher has made an attempt to provide remedial solutions
in the form of suggestions.

1.8

LIMITATIONS OF THE STUDY:

1) The organization providing commodity services in limited geographical area
i.e. only in satara city.
2) Some of the respondents were not providing sufficient information.

CHAPTER II
PROFILE OF THE ORGANIZATION
2.1

INTRODUCTION TO THE ORGANIZATION:

Geojit BNP Paribas today is a leading retail financial Services Company in
company rides on its rich experiences in the capital market to offer its clients a
wide product of saving and investment solution. The gamut of value-added
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products and services offered ranges from equities and derivates to mutual funds,
life and general insurance and third party fixed deposits.
Geojit BNP Paribas has membership in and is listed on the National Stock
Exchange (NSE) and Bombay Stock Exchange (BSE). In 2007, global banking
major BNP Paribas joined the companys other shareholder- Mr. C. J. George,
KSIDC (Kerala State Industrial Development Corporation) and Mr. Rakesh
Jhunjhuwala -when it took a stake to become the single largest shareholder.
Strategic joint venture and business partnership in the Middle East has provide
the company access to large Non-Resident Indian (NRI) population in the region.
Now, as a part of the BNP Paribas is a well positioned to further expand its reach
to NRIs in 85 countries.

2.1.1

Expanding Range of Online Products and Services:

Geojit BNP Paribas has proven expertise in providing online services. In the year
2000, the company was first stock broker in the country to offer Internet Trading.
This was followed by intergrading the first bank payment gateway in the country
for Internet Trading, and many other industry first riding on this expert and
harnessing BNP Paribas personal investors expertise as the leading online broker
in Europe.
And it helps company to rapidly expand its business in this segment. Presently,
clients can trade online in equities, derivatives, currency futures, mutual funds and
IPOs and select from multiple bank payment gateways for online transfer of
funds, strategic B2B agreement with Axis Bank and Federal Bank enables the
respect banks clients to open integrated 3-in-1 accounts to seamlessly trade via a
sophisticated online trading platform.
2.2

BRIEF HISTORY OF THE ORGANIZATION:

It all started in the year 1987 when Mr. C. J. George and Mr. Ranajit Kanjilal
founded Geojit as a partnership firm. In 1993, Mr. Ranajit Kanjilal retired from
the firm and Geojit become the proprietary of concern of Mr. C. J. George. In
1994, it became a Public limited company named Geojit Securities Ltd. The
Kerala State Industrial Development Corporation Ltd. (KSIDC), in 1995, became
a co-promoter of Geojit by acquiring a 24 percent stake in the company, the only
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instance in India of a government entity participating in the equity of stock

broking company.
The year 1995 also saw Geojit Broking Company being listed at the stock
exchange, Mumbai (BSE) in the year 2000 Companys wholly owned subsidiary.
Geojit Commodity Ltd launched online futures trading in agric-commodities,
precious metals and energy futures on multiple commodity exchanges in 2003.
This was also the year when the company was renamed Geojit Financial
Services Limited (GFSL). The Board consists of professional directors; including
a Kerala Government nominee. With effect from July 2005, the company is also
listed at National Stock Exchange (NSE).
Company is charted member of the Financial Planning Standards Board of India
and is one of the largest Depository Participant (DP) brokers in the company.
On 31st December 2007, the company closed its commodity business and
surrendered its membership in various commodity exchange held by Geojit
Commodity Ltd. Global banking major BNP Paribas took stake in the year 2007
to become the single largest shareholder. Consequentially, Geojit Financial
Services Ltd. has been renamed as Geojit BNP Financial Services Ltd.

2.2.1 About BNP Paribas:

BNP Paribas (www.bnpparibas.com) is one of the 6 strongest banks in the world
according to standard and poor. With a presence in 85 counties and more than 2,
05,000 employees, 1, 65,200 of which in European leader in financial services. It
holds key positions in its three activities. Retail Banking, Investment Banking.
The group benefits from its four domestic markets: Belgium, France, Italy and
Luxemburg. BNP Paribas also has a significance presence in the states and strong
position in Asia and the emerging markets.
BNP Paribas has been operating in India since 1860 in a number of businesses
such as Investment Banking (CB), private banking (BNP Paribas Wealth
Management.),Life Insurance(SBI Life) and Asset Management (Sundaram BNP
Paribas), Infrastructure Funding (Seri BNP Paribas), Retail Financing (Sundaram
BNP Paribas Home Finance), Car Contract Hiring (Arval), Institutional Broking

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(BNP Paribas Securities India) and Securities Services (Sundaram BNP Paribas
Securities Services and BNP Paribas Sundaram Global Securities Operations.)

2.2.2

Progress of Geojit:

Product innovation backed by a high level of domain specific knowledge and state
of the technology has helped Geojit BNP set many milestones including numerous
industries.
1986: Membership in Cochin Stock Exchange (CSE).
1994: Becomes a Public Ltd Company named Geojit Securities Ltd.
1995: Kerala State Industrial Development Corporation Ltd. (KSIDC) acquires
24% equity stake.
1996: Launch of Portfolio Management Services with SEBI regulation.
1997: Depository Participant (DP) under National Securities Depository Ltd.
1999: Membership in Bombay Stock Exchange (BSE).
2000: BSE listing.
First Broking Company in India to offer online trading facility.
Commences Derivative Trading with NSE.
Company renamed as Geojit Financial Services Ltd.
2004: National launch of online futures trading in Cardamom.
2005: NSE listing.
Geojit Credits a subsidiary registers with RBI as a Non-Banking Financial
Company (NBFC).
National launch of online futures trading in coffee.
2006: Charter member of the Financial Planning Standards Board of India.
2007: BNP Paribas takes a stake in the companys equity, making it the single
largest shareholder.
Establishes joint venture in Saudi Arabia to serve in the Saudi National and to the
NRI.
2008: BNP Paribas Securities India Pvt. Ltd., a joint venture with BNP Paribas
S.A. for institutional brokerage. First brokerage to be offers full Direct Market
Access Execution in India for institutional clients.
2009: Launch of property services division.
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Launch of online trading in currency derivatives.

Consequent to BNP becoming the largest stakeholder in Geojit Financial Services,
company is renamed as BNP Paribas Financial Services Ltd.
2010:Launch of FLIP(Financial Investment Platform), a new advanced online
investment platform.
Launch of state of the art Mobile Trading platform to empower clients to trade
from anywhere, even while on the move through the innovative application FLIPME.

2.2.3 Change In The Name of Company:

The members may recollect the issue of 0.28 crore warrants to BNP Paribas in
March 2007 based on them approval and other statutory clearances. BNP Paribas
has completed the open offer and pursuant to the issue terms of the warrants, 1.39
crore shares were issued upon increasing the shareholding from 27.18% to
34.33%.
Members have decided in June 2007 to change the name of the company to Geojit
BNP Paribas Financial Services Ltd., subject to BNP Paribas holding at least 33%
of the paid up share capital of the company. As mentioned arrears, the
shareholding of BNP Paribas has been increased to 34.33% in January 2009 and
hence the name of the company was changed w.e.f. 1st April, 2009.

2.3

SUBSIDIARIES, ASSOCIATES OF THE COMPANY:

Ministry of corporate affairs granted approval under section 212 (8) of the
Company Act,1956 exempting the company from attaching copies of the balance
sheet, profit and loss account, reports of the Board of Directors and Auditors of
subsidiaries as specified under section 212 (1) of the Companies Act, 1956.
Accordingly those documents are not attached to the balance sheet. However,
summarized financial information of the subsidiaries is included in this annual
report. Full annual report including financial information of the subsidiaries is
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published on the website of the company and will be available upon request by
any member interested in obtaining the same.
The wholly owned subsidiaries, Geojit Commodities Ltd. Has discontinued the
commodity brokerage business w.e.f. 31st December, 2008 in terms of the
approval of the members. The company received a compensation of Rs. 40/- crore
from BNP Paribas for the discontinuation, as this was consequent to their
becoming the companys major shareholder Geojit Commodities Ltd, recorded
revenue of Rs.17.66 crore from operations (previous year Rs. 20.28 crore).
It recorded a profit after tax of Rs.5.21 crore from ordinary activities (previous
year 3.92 crore). Since the main business of the company was discontinued, the
name was changed to Geojit Investment Services Ltd. w.e.f. 2nd April, 2010.
A scheme of Amalgamation of Geojit Investment Services Ltd was approved by
the Board of Directors of respective companys subject to the approval of
members and necessary regulatory approvals.
The company increased in Geojit Credits Private Ltd, a Non Banking Financial
Company from 51% to 65.03% during the year Geojit Credits Private Ltd.
recorded total revenue of Rs. 4.13 crore and profit after tax of Rs. 2.34 crore and
profit after tax of Rs. 2.34 crore during the year.
The revenue of Geojit Technologies Private Ltd, a step down subsidiary engaged
in software development and services grew by 46% to Rs. 5.46 crore from
Rs.3.74 crore in the previous year. The company recorded a net profit after tax of
Rs.1.24 crore during the year, an increase of 38%.
The company made a fresh issue of shares to BNP Paribas in April, 2009 there by
giving them 35% capital in the company for a total consideration of Rs.60 crore.
Another step down subsidiary viz. Geojit Financial Distribution Private Ltd.
engaged in insurance referral has recorded 113% increase in total income from
Rs.1.20 crore to Rs.2.56 crore and 45% increase in net profit from Rs. 62.02 lacs
to Rs. 90.15 lacs.
2.3.1

Consolidated Results:

The consolidated financial results represents those of Geojit BNP Paribas

Financial Services Ltd. its subsidiaries i.e. Geojit Investment Services Ltd,
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(formerly Geojit Commodities Ltd.), Geojit Financial Management Service

Private Ltd,(100% held), Geojit Credits Pvt. Ltd., (65.03%held) its step down
subsidiaries i.e. Geojit Technologies Pvt. Ltd., (100% held during the year and
now 65% held).
Sigma System International FZLLC, Dubai (100% held) and its joint venture i.e.
BNP Paribas Securities India Pvt. Ltd., (49.99% held), Barjeel Geojit Securities
L.L.C. Dubai (30% held), Al-oula Geojit Brokerage Company, Saudi Arabia (28%
held) prepared in accordance with the relevant accounting standards issued by the
Institute of Charted Accountants of India.
The company has recorded consolidated total income of Rs. 191.98 crore for the
year ended 31st March, 2009 and a net profit before tax of 11.56 crore from
ordinary activities. Net profit after tax and extra-ordinary item of compensation
received from BNP Paribas for the discontinuing the commodities brokers age
business of Rs. 40 crore was Rs. 40.01 crore.
The consolidated results mentioned above is after providing for the loss of Rs.
4.67 crore incurred by Al-Oula Geojit Brokerage Company and Rs. 13.36 crore
incurred by BNP Paribas Securities India Pvt. Ltd., which commenced operations
during the year.

2.3.2

Joint Venture:

Barjeel Geojit Securities L.L.C. a joint venture in Dubai with Al-Saud group in
which Geojit hold 30% recorded a net profit of Rs.2.05 crore during the year
(previous year Rs. 15.11 crore)
Al-Oula Geogit Brokerage Company, the joint venture in Saudi Arabia with AlJohar group in which Geojit hold 28% commenced operations in November 2008.
This joint venture reported a net company taking into account in the current year.

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BNP Paribas Securities India Pvt. Ltd., The joint venture in Mumbai with BNP
Paribas for institutional broking, commenced operations in June 2008 and has
crore including pre-operative expenses Geojit hold 49.99% in this joint venture.

2.4DEPARTMENTS PROFILE:
2.4.1

Board of Directors:

The chairman of Geojit BNP Paribas financial services Ltd is Mr. A.P. Kurian and
managing director include C.J. George, Olivier Daneil Andre Le Grand, Pierre
Rousseau, Manoj Joshi ISA, Mahesh Vyas, Rakesh Jhunjhunwala, R. Bupathy,
and Punnoose George.
Board of Director:
A.P.Kurian

: Chairman.

C.J. George

: Managing Director.

Olivier Daniel Andre Le Grand

Manoj Joshi IAS.
Mahesh Vyas.
Rakesh Jhunjhuwala.
R. Bupathy.
Punnoose George.

2.4.2

Management Team:

C.J.Geoge is managing director of Geojit BNP Paribas Financial Services Ltd.

Satish Menon is operational directors. A Balakrishnan is chief Technology officer.
K-Venkitesh is National Head-distribution, officer Stefan Groening is planning
and control director, Jean-Christophe Guugeon is marketing manager. Binoy V
Samuel is chief financial officer. Jaya Jacob Alexander is chief of human
resources. T. Jayaraj is company secretary.
Management Team is as followed:
Management Team:
C.J.Geoge.

: Managing Director

Satish Menon

: Director (Operation)

A. Balakrishnan

: Chief Technology Officer

K. Venkitesh

: National-Head Distribution
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Stefan Groening

: Director (Planning and Control)

Jean- Christophe

: Director (Marketing)

Binoy V Samuel

: Chief Financial officer

Jaya Jacob Alexander

: Chief of Human Resources

T. Jayaraj.

: Company Secretary

2.5 IMPORTANT STATISTICAL INFORMATION:

On a standalone basis, the company earned a total income of Rs. 159.42 crore for
the financial year, a decrease of 22% over the previous years figure of Rs. 203.77
crore. The company recorded an operating profit of Rs. 20.26 crore and a net
profit of Rs. 14.52 crore. Basic financial year, a decrease of 20% over the
previous year figure is Rs. 239.73 crore.
The company recorded an operating profit of Rs. 51.56 crore and a net profit of
compensation of the discontinuation of commodities brokerage business.
Consolidated basic earnings per share performance were affected by the write off
of preliminary expenses incurred by new joint venture, which started operation
during the year.

2.5.1

Dividend:

Considering the performance of the company, the directors are pleased to

recommend the payment of dividend of 50 paisa per share for the year ended 31 st
March, 2009. The payment of dividend together with tax thereon will absorb Rs.
12.98 crore.

2.5.2

Increase In The Share Capital:

During the year under review, the paid-up share capital of the company increased
from Rs. 20.95 crore to Rs.22.34 crore consequent to issue of 1, 39, 10,514 equity
shares to BNP Paribas upon conversion of warrants and issue of 510480 equity
shares to employees upon exercise of stock options under the employee stock plan
of the company.

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2.6ORGANIZATIONAL STRUCTURE:
Table No. 2.1
Organizations Hierarchy:
Sr. No.

Name

Mr. A.P.Kurian.

Mr. C.J. George.

Designation
Non-Executive and Independent
Chairman.
Managing Director and Chief
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Mr. Akleshkumar Sharma

Mr. Mahesh Vyas.

Mr. Rakesh Jhunjhunwala.

Mr. Ramanathan Bupathy

7
8
9
10
11
12
13
14
15

Mr. Punnoose George

Mr. Olivier Le Grand.
Mr. Pierre Rousseau.
Mr. Satish Menon.
Mr. A. Balakrishnan.
Mr. K. Venkitesh
Mr. Stefan Geoening.
Mr. Jean Christophe G.
Mr. Binoy V. Samuel

16
Mrs. Jaya Jacob Alexander.
(Source: www.geojitbnpparibas.com)

Promoter.
Non-Executive and Independent
Director.
Non-Executive and Independent
Director
Non-Executive Director
Non-Executive and Independent
Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Director (operation).
Chief Technology Officer.
National Head-Distribution Officer
Director(planning and control)
Director(marketing)
Chief Financial Officer
Chief of H.R.

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Organizational Chart:
Board of Directors

Managing Director

Operation Manager Planning & Control Manager Marketing Manager

National Head Distributors

Chief Officer

Technology Officer

Finance Officer

H.R. Manager

Financial Service Provider

(Agents, Executive, Trainees)

CHAPTER III
CONCEPTUAL FRAMEWORK
3.1INTRODUCTION TO THE STUDY:
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Commodities market, Commodity trading, commodity future, These terms are not
very commonly understood by many However, commodity markets offer as mush
an opportunity to investors as does. The stock market Commodity is a product
haling commercial value, which can be produced, bought, sold and consumed.
Commodities are basically the product of primary sector of an economy primary
sector of an economy is that part of the economy which is concerned with
agriculture and extraction of raw material.
Commodity market is a place where trading in commodities takes place. It is
similar to an equity market but instead of bulling or selling shares one buys or
sells commodities.
In order to quality as a commodity, an article or a product has to meet some basis
characteristics. These are listed below.
1) The product has not gone through any complicated manufacturing activity,
though simple processing (like mining, cropping) it not ruled out, in other
words, the product must be in a basic, raw, unprocessed state, (for instance
wheat is a commodity but wheat flour and bread are not commodities)
There are of course some exceptions to this rule e.g. in case of metals and
product, like sugar.
2) Major consideration while bulling a particular commodity is its price
(since there is hardly any difference inequality from seller to seller).
3) The product has to be fairly standardized in the sense that there cannot
such differentiation in a product based on its quality (e.g. Rice in rice
though different, of rice can be treated as different commodities of hence
traded as separate contracts)
4) Prices of the product are determined by market forces demand and supply
and they undergo rapid changes/ Fluctuation (price, must fluctuated
enough to create uncertainty which meanness both risks and potential
profit / loss for buyer and sellers)
5) Usually there would be many competing sellers of the product in the
market
6) The product should have adequate shelf life so that delivery of a buttress
contract can be deferred.

How old are the Commodities Markets:

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The commodities markets are one of the oldest prevailing markets in the human
history in back derogatory trading started off in commodities with the earliest
records being traced back to the 17th century when rice futures were traded in
Japan.

3.2EVALUATION OF COMMODITY MARKET IN INDIA:

India has been an agro-based economy. It has a market for most of the agro-based
commodities India are the largest consumer of gold in the world which implies a
hedge market for the yellow metal. India has huge spot markets for all these
commodities for instance. Indore has a hedge market for soya, Ahmadabad for
castor seeds and surendranager for cotton etc.
During the pre-independence area India also had a thriving future market. For
commodities such as gold, silver, cotton, edible oils, etc in mid 1960 due to wars
hatred calamities and the consequent shortages. A future trading in most
commodities was banned.
Currently heftier markets that exist in India in India are localized for specific
commodities for exakarala has an exchange for pepper, Ahmadabad for cantor
seeds. And mambas are the major center for gold ex. These exchanges however
have only a regional presence and are dominated by people who are involved with
the physical trade of that commodity.
Bombay cotton Trade Association Ltd. Set up in 1875 was the first organized
future market Bache. L.t.d was established in 1893. Following the wide spread
discontent amongst leading cotton mill owner of merchants over functioning of
B.C. T. Association, The future trading in oil seeds started in 1900 with the
establishment of the Gujarati vapory manual which carried on future trading in
groundnut, cost seed and cotton.
Futures trading in wheat were existent at several places in Punjab and Uttar
Pradesh But the most notable future exchange for wheat was chamber of
commerce at hour set up in 1913 futures trading in bullion began in Mumbai in
1920. Calculate Hessian Exchange Ltd. was established in 1919 for future trading
in rawjarte and jute goods.

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But organization future trading raw jute began only in 1927 with the
establishment of East Indian jute Association Ltd These two associations
amalgamated in 1945 to form the East India lute and Hessian Ltd. To conduct
organized trading in both raw jute and jute goods.
Forward contracts (Regulation) Act was enacted in 1952 and the forwards market
commission (FMC) was established in 1953 under the ministry of consumer
Affairs and public Distribution induce course several other exchange were created
in the country to trade in diverse commodities.

3.3THE CURRENT DEVELOPMENT IN THIS MARKET:

The government has now allowed national commodity exchange similar to the
Bombay stock Exchange and the National stock exhaust to come up and let them
deal in commodity derivatives in an electronic trading environment. These
exchanges are expected to offer a nationwide anonymous, order-driven, screenbased trading system for trading. The forward market commission (FMC) will
regulate these exchanges.
Consequently four commodity exchanges have been approved to commerce
business in this regard they are.
1) Multi commodity exchange of India Lt.d (MCX) located at Mumbai.
2) National commodity and Derivatives exchange Ltd. (NCDEX) located at
Mumbai.
3) National Board of trade (NBOT) located at Indore.
4) National multi commodity exchange (NMCE) located at Ahmadabad.

3.3.1

The Different types of commodities that are traded in these

markets:
World over one will find that a market exists for almost all the commodities
known us. These commodities can be broadly classified into the following.
1) Precious Metals- Gold, silver, Platinum etc.
2) Other Metals- Nickel, Aluminum, Copper, Zinc etc.
3) Agro-Based Commodities Wheat, Corn, Cotton, oils, oilseeds etc.
4) Soft commodities Coffee, Cocoa, sugar etc.
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5) Live stock Live cattle park Bellies etc.

6) Energy- Crude oil Natural Gas gasoline etc.

3.3.2 Constituents of Commodity Market:

The system include following element,
1) Buyer/ Sellers/Users/Producers, Farmers:
Cooperatives, Metal (precious and other) producers/ suppliers/stockiest, APMC,
Man dies, Traders, Brokers, Members of commodity exchanges, state civil supply
corporations, Hedgers, speculators and arbitragers (These could include corporate
houses FMCCS companies)
2) Logistics companies:
Storage and Transport companies/operator quality are testing and certifying
companies the value.
3) Market and Exchanges:
Spot Market (Mandies, Bazaars and commodity Exchanges (National level and
Regional level)
4) Support agencies:
Depositories (De-Materialization agencies, central and state warehousing
corporation and Regional level)
5) Lending agencies:
Banks, Financial institutions and the different segments in the commodities
market:The commodities market exists in taro distinct forms, namely the Over The
Counter (OTC) Market.
The exchange based market also as in equities there exists the spot and the
derivatives segments the spot market are essentially over the counter markets and
then participation is restricted to people who are involved with that commodity,
say the farmer, processor, wholesaler etc. A majority of the derivative trading
takes places through exchange-based market with standardized contracts,
settlements etc.
3.4 CHARACTERISTICS

OF

OVER

THE

COUNTER

COMMODITY

MARKET:

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1) The OTC Market are essentially spot market, and are localized for specific
commodities Almost all the trading that takes place in these markets is
delivery boned.
2) The buyers as well as the sellers have their set of brokers who negotiated the
prices for them. This can be illustrated with the help of the following example
a farmer who produce castor wishing; to sell his produce would go to the local
Mandy. There he would contact his broker who would in turn contact the
brokers cepresoneting the buyers. The buyers in this come would be
wholesalers or refiners.
3) In event of a deal taking place the goods and the money would be exchanged
directly between the buyer and the seller they, it can be seen that this market is
restricted touring thus people who are directly involved with the commodity.

3.4.1 Characteristics of the Exchange Traded Markets:

The exchange traded markets are essentially only derivatives market and are
similar to equity derivatives in their working.
1) Everything is standardized and a person can purchase a on tract by paying
only a percentage of the contract value.
2) A person can also go short on these exchanges.
3) Also even though there is provision for delivery most of the contracts

are

enquired- off before expiry and are salted cash.

3.4.2

Function of commodity market in India:

There are three types of regulated market in India.

1) Spot Markets:
Agreements/ Direct purchases for immediate consumption.
2) Forward Market: (Contracts)
A Forward contract is an agreement to buy or sell an asset on a specified date
for a specified price one of the parties to the contract assumes a long position
and agrees to buy the underlying asset on a certain specified future date for a
certain specified price. The other party assumes a short position and agrees to
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sell the asset on the same date for the same price. Other contract details like
delivery date, price and quantity are negotiated bilaterally by the parties to the
contracts. The forward contracts are normally traded of forward contracts are.
The salient features of forward contract are:
They are bilateral contracts and hence exposed to counter party risk.
Each contract is custom designed and hence is unique in terms of contract
size, expiration date and the asset type and quality.
The contract price is generally not available in public domain.
On the expiration date, the contract has to be salted by delivery of the asset.
If the party wishes to reverse the contract it has to compulsorily go to the
same counterparty. Which often results in high prices being charged?
However forward contracts in certain markets have become very standardized,
as in the close of foreign exchange, thereby reducing transaction costs and
increasing transactions volume. This process of standardization reaches its,
limit in the organized futures market.
3) Derivatives:
A derivative is a product whose value is derived from the value of one or more
underlying gribbles or assets in a contractual manner. The underlying asset
can be equity, fore, commodity or any other asset. In over earlier discussion
we saw that wheat farmers may wish to sell their harvest at a future data to
eliminate the risk of a change in prices by that date such a transaction is an
example of a derivative. The price of this derivative is driven by the spot price
of wheat which is the underlying in this case.
Derivative markets can broadly be classified as commodity derivatives market
and financial derivatives markets. As the name suggest. Commodity
derivatives markets trade contracts for which the underlying asset is a
commodity it can be an agricultural commodity like wheat, soybeans,
repressed, cotton etc. or previous. Metals like gold, silver etc. financial
derivative, market trade contracts that have a financial asset or variable as the
underlying.
4) Hedging:
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Many participants in the commodity futures market are hedgers. They use the
futures market to reduce a particular risk that they face.
This risk might relate to the price of wheat or oil or any other commodity that
the person deals in the classic hedging example is that of wheat farmer who
wants to hedge the risk of fluctuations in the price of wheat around the time
that his crop is ready for harvesting By selling his crop forward, he obtains a
hedge by locking in to a predetermined price hedging does not necessarily
improve the financial outcome. Indeed it could make the outcome worse.
What it does however is that it makes the outcome more certain.
Hedgers could be Government institutions, private corporations Like financial
institutions ginners, processors etc, who are influenced by the commodity
prices.
5) Arbitrage:
A Central idea in modern economies is the law of one price. This states that in
a competitive market. If two assets are equivalent from the point of view of
risk and return, they should sell at the same price. The price of the same asset
is different in two markets, there will be operator, who will buy in the market
where the asset sells cheap and sell in the market where it is costly. This
activity term day arbitrage, involved the simultaneously different. Purchase
and sale are of the same or essentially similar and security in two different
markets for advantageously different prices. The bulling cheap and selling
expensive continues till prices in the two markets reach equilibrium hence,
arbitrage helps to equalize prices and restore market efficiency.
6) Speculation:
It facilitates speculation by providing opportunity to people although not
involved with the commodity, to trade on the views in the movement of
commodity prices. The speculative position is taken with a small margin
amount that is paid to the exchange. And the contract can be squared off
anytime during the trading hours.
7) Spot Market:

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Direct purchases and sales are achieved in spot markets normally for
immediate consumption buyers and sellers meet. Face to Face and deals are
struck this is a kin to over the counter (OTC) market where there is no need
for organization like a commodity change these are traditional markets classic
example of a spot market is a minds where food grains are sold in bulk A
farmers would bring their produce to the market and food grain merchants/
traders would purchase the produce on the spot and settle the deal in spot
markets thus call for immediate delivery of goods/series against actual
payment.
3.5 WHY TO INVEST IN COMMODITIES:
You may have your debt and equity funds in place but investing in commodities
could just be the one element to improve your portfolio commodity trading
provides an ideal asset allocation also helps you hedge against inflation and but a
place of global demand growth. In 2003, the ban on commodity trading was listed
after 40 years in India.
Now more people are interested in investing in this new asset class, while price
fluctuations in the sector could get rather volatile depending on the category
returns are relatively higher.
However as this is not a primary area of investment for most there is a lot of
apprenousion about when and how to invest outlook money seeks to answers
some of these questions and help you assess a whole new turf for making money.
Commodities allow a portfolio to improve over all return at the same level of risk.
Ibbotson associates, a leading US0based authority on assets allocated estimates
that commodities increased returned between 133 and 180 basis points at no extra
risk.

3.5.1 Who should invest:

Any investor who wants to take advantage of price movements and wishes to
diversity his portfolio can invest in commodities. However retail and small
investors should be careful while investing in commodities as the sowings are
volatile and lack of knowledge may result in loss of wealth.

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Investors must understand the demand. Cycles that commodities go through and
should have a view on what factors may affect this ideally; you should invest in
select commodities that you can analyses rather than speculate across products
you have no idea about.
Investing in commodities should be undertaken as a kicker in your portfolio and
not as the first destination for your money.

3.6BENEFITS TO INVESTORS:
1) High financial leverage is possible in commodity markets, in case of
stock. An investor heeds to put up the full amount of the stock value to but
the stock with commodities, you control commodity futures contracts,
with a margin, which I usually between 5% to 10% of the value of the
commodity Investor can effectively hedge
2) Investor can also hedge his risk on investment in stock and debt markets
Since commodities provide a choice and provide one more alternative
avenue in the investment port for.
3) Commodity market are extremely transparent in the sense that the
manipulation of prices of commodity is excrement, difficult, Given the
knowledge of the commodity the investor can be thus clear about what he
expect in foreseeable future.
4) Business involves just you and the market.
5) With the rapid spread of derivatives trading in commodities in dies are not
correlated implies that the commodity markets can be used as an effective
diversification tool, where investors can park their money.
6) With the rapid spread of derivatives trading in commodities, this route too
has become an option for high net worth and savvy investors to consider
in their overall asset allocation
7) A look at the performance of the commodity market during the last year
shows that the positive movement was witnessed during most parts of the
year.

3.6.1

Commodity Trading:

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1) Its an age old phenomenon modern market comes up in the late 18 th

century when farming began to be modernized Though the trades
mechanisms have changed the basics are still the same.
2) In commonly parlance commodities means all types of products. However
the Foreign Currency Regulation Act (FCRA) defines them as every kind
of movable property other than actionable clams, money and securities.
3) Commodity trading is Noting but trading in commodity spot and
derivatives (Futures). If you are keen on taking a buy or sell position based
on the future performance of agricultural commodities or commodities
like gold, silver, metals or crude then you could do so by trading in
commodity derivatives.
4) Commodity derivatives are traded on the National Commodity and
Derivative Exchange (NCDEX) and the Multi Commodity Exchange
(MCX) Gold, Silver, Agric-commodities including grains pulses, spices
oils and oilseed, menthe oil metals and crude are some of the commodities
that these exchanges legation.
6) Trading in commodities futures is quite similar to equity future trading
you could take a long position (Where you buy a contract) or a short
position/where you sell it) simply seeking, like in equity and other
markets. If you think prices are on them way up you takes a long position.
And when prices are headed south you opt for assorts position.

3.6.2

Benefits to Producers:

It is useful to the producer because he can get an idea of the price likely to prevail
at a future point of time and therefore can decide between various competing
commodities, the best that suit, him. Farmers for instance, can get assured prices,
decide on the crop that they want to take and since there is transparency in prices
he can decide when and where to sell.

3.6.3 Benefits to the Economy:

As the constituents of the commodity market system get benefited Indian
economy in turn is also expected to gain a lot Growth in the commodity markets
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implies that there could be tremendous benefits to the Indian economy in terms of
business generation and employment opportunity.

3.6.4 General Benefits and Other Advantages for all Players:

1. Improved product quality:
Since the contracts for commodities are standardized, it becomes essential for the
producers sellers to ensure that the quality of the commodity is as specified in the
contract.
2. Credit Accessibility:
Buyers and sellers can avail of the bank finances for trading in commodities As
mentioned here, some nationalized banks as also some banks in the private sector
have come forward to offer credit facilities for commodities trading more and
more banks are likely to wait in line looking at the huge potentials that
commodity market offers in India.
3.6.5

The Risk Factors of commodity trading:

1.Commodity trading is done in the form of future and that throws up a huge
potential for profit and loss as it involves predictions of the future and hence
uncertainty and risk. Risk factors, in commodity trading are similar to future
trading in equity markets.
2. A major difference is that the information availability on supply and demand
cycles in commodity markets is not as robust and controlled as the equity market.

3.7TYPES OF COMMODITY MARKET:

Main three types of the commodity market in that.
1. MCX
2. NCDEX
3. NMCE
1) MCXHeadquartered in the financial capital of India, Mumbai, Multi Commodity
Exchange of India Ltd (www.mcxindia,com) is a demutualised nationwide
electronic commodity futures exchange set up by financial Technologies (India)
Ltd. With permanent recognition from Government of India for facilitating online
trading, clearing and settlement operations for futures market across the country.
The exchange started operations in November 2003.
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MCX has achieved three ISO certifications including ISO 9001:2000 for quality
management, ISO 27001:2005- for information security management systems and
ISO 14001:2004 for environment systems.
MCX offers futures trading in more than 40 commodities from various market
segments including bullion, energy, ferrous and Non-ferrous metals, oil and oil
seeds, cereal, pulses, plantation, spices, plastic and fiber. The exchange strives to
be at the forefront of developments in the commodities futures industry and has
forged strategic alliances with various leading International Exchanges, Including
Tokyo commodity exchange, Chicago climate exchange, London metal exchange,
New your mercantile exchange, Bursa Malaysia Derivatives, Behead and others.
2) NCDEX:
National commodity and Derivatives Exchange Ltd is a technology driven
commodity, exchange it is a public limited company registered under the
companies Act 1956 with Register of companies.
1) Crude Palm Oil:Annual edible oil trade in India is worth over Rs 440 billion with the share of
CPU being nearly 20% (Rs 80-90 billion) The country is over dependent once
imports There is a close inter linkage between the various vegetable oils produced
traded and insured across the worked. The average monthly fluctuation in prices
of imported CPO traded at kindle cone of the major importing ports in Gujarat)
has been at 9.7% during the past two and a half years.
The maximum monthly fluctuation is being high as 25% during the period. Palm
oil is extracted from the mature fresh fruit bunches (FFB) of oil, palm plantations
one hectare of oil palm yields approximately 20 FFB, which when crushed yields
booms of oil (including the kernel oil, which is used both for edible and industrial
purpose) crude palm oil Crude palm oil.
R.B.D (Refined, Bleached Deodorized) Palm oil, R.B.D palm oil and Crude Palm
Kernel Oil (CPKO) are the various forms of palm oil traded in the market.
Demand and Supply of CPO:
CPO is used for human consumption as well as industrial purposes. The
consumption of palm oil (both food and industrial consumption put together) in

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the world is growing at the rate of 7.37% compounded annually during the last 12
years periods while in the importing countries like china and European union the
consumption of palm oil is growing at the rate of 5.2% and 4.8% respectively the
consumption on growth rate for the world. Leading palm oil importer (in specific
and edible oils in general) India stands at 25% India china Pakistan and the
European Union are the major importers of palm oil. India is the largest importer
of C.P.O with a share of over 15% of the total quantity traded in the international
market. The total imports of India, China, Pakistan and European, Union amount
to approximately 56% of the total global export of palm oil annually.
2) Soybean:
The market size of the popularly known miracle bean in India is over Rs-5000
crore with an annual production of 5.0-5.4 million tons, soybean constitutes
nearly 25% of the country total oilseed production the average monthly
fluctuation in prices of soybean traded at one of the active soybean spot market at
indene (Madhya Pradesh) has been at 10.07% during the past two years the
maximum monthly fluctuation being as high as 24-30% during the period.
Historically soybean prices in the major spot markets across the country have
been fluctuating in the range of 5-9% soybean is the single largest oilseed
production in the world. The commodity has been commercially exploited for its
utility as edible oil and animal feed on crushing mature beans around 18% oil
could be obtained. The rest are being the oil cake/meal which terms the primes
source of protein in animal feeds.
3) Gold:
For countries Gold has meant wealth prestige and power, and its rarity and natural
beauty have made it precious to men and women alike. Owning gold has long
been a safeguard against disaster. Many times when paper money has failed, men
have turned to gold as the one true source of monetary wealth. Today is No
different while there have been fluctuation. In every market and decided
downturns in some. The expectation is that gold will hold its own. There is
limited amount of gold in the worked so investing in gold is shrills a good way to
plan for the other commodities and financial assets and tend to make its return in
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sensitive to business by different people for a wide Variety of reasons as

investment and so on.
4) Silver:
The dictionary describes it as a white metallic element sonorous, ductile, very
malleable and capable of high degree of polish it also has the highest thermal and
electrical conductivity of any substance. Silver is somewhat harder than gold and
is second only to gold in malleability and ductility silver remains one of the most
prominent candidates in the metal complex as for as futures trading is concerned
Thames to its unique volatility silver has remained a hot favorite speculative
vehicle for the small time traders.
Though futures trading was banned in India since late sixties. Parallel futures
markets are skill very active in Delhi and Indore speculative interest in the white
metal is so intense that it is believed that combined volume of Indian punters
represent in the white metal issue intense that it is believed that combined volume
of Indian punters represent almost 40 percent of volume traded at new York
commodity exchange Delhi Rajasthan, MiPad UP are the active pockets for the
silver future. Until recently Rajkot and Mathura were conducting future but now
players have diverted toward come trade.
Most of the worlds silver is mined in the US Australia, Mexico, Peru and Canada
cash markets remain highly unorganized in the silver and impurity and excessive
speculation remain key issue for the trade taking cue from gold government of
India is planning to introducing hall marking in silver which is surely to address
quality and credibly o Indian silver ware and jeweler industry the unique
properties of silver restrict its substitution in most application.
5) Copper:
Copper ranks third in world metal consumption after Steel and Aluminum. It is a
product whose fortunes directly reflect the state of the worlds economy. Copper
is the best Non-precious metal conductor of electricity. The metals exceptional
strength, ductility, and resistance to creeping and corrosion, makes it the preferred
and safest conductor for building wiring. Copper is also used in power cables,
either insulated or uninsulated, for high, medium and low voltage applications.
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Copper is an essential component of energy efficient motors and transformers and

automobile.
6) Black Pepper:
Known as the king of spices black pepper has remained the most precious and
valuable form of spices in the worked. It is the 3 rd most added ingredient in food
among the wide range of spices. Indian is one of the largest producers of black
pepper, after china and Vietnam. Black pepper has played a pivotal role in Indias
international trade and it is said that the Europeans came to India primarily for
this very spice. A wide variety of black pepper is traded at an international level,
with India as one of the top five exporters of black pepper, along with Vietnam,
Indonesia, Brazil and Malaysia.
7) Turmeric
From a simple housewife in an Indian family to the hermits in the Himalaya,
Turmeric is associated with everyones lives in some way or the other. It has been
used since time immoral as a food ingredient, medicine, herb, and coloring agent.
It is also popular as medicine popularly used as a part of home remedy, when
applied on face it is said to impart a natural glow on the skin. Turmeric is one of
the most popular spices of India. Almost in every dish prepared in India, Turmeric
is added in it.
Further, it also regarded by the Hindus as something sacred for use in
ceremonial and religious functions. With so many varied usages turmeric is a
popular product all over the world. Several unique properties of turmeric make it
an ideal choice as a food flavor. It also finds use in the preparation of liquors,
dyestuffs, medicines, cosmetics and toiletries. It is used as natural colorant. The
curcuma present in turmeric imparts its distinctive yellow color. In beauty
enhancement, women have used turmeric paste since very ancient times.
Today, it is widely used for its antiseptic and anti tanning properties. It prevents
and cures pigmentation, making skin translucent and glowing besides
smoothening it. It also helps in protecting the skin from water allergy. India is the
principal supplier of turmeric to the world markets producing about, 1.00.000
tones of rhizomes per annum.
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3.8

M.B.A PROJECT

SCOPE OF COMMODITY MARKET:

Investment in commodity markets has been leery popular and rewarding for
investors in U.K. and U.S.A for investors looking for diversification beyond stock
markets. Commodity markets otter annotator investment option. The commodity
markets activity, volume and players multiplied in the recent past India although
the trading in commodity markets and commodity exchanges it banks and other
financial institutions to operate in these in commodities in commodities markets
maul tale us to the basic tends of risk and return theory his expended return and
risk Normally it is a risk reward relationship the higher the risk higher is the
expected return and vice area.

3.9

LIMITATIONS OF COMMODITY MARKET:

Commodity markets, like any other markets, have their own limitations too some
of them are commodity market prices can fluctuated wildly depending on the
factors which are sometimes beyond human control. (Floods, storms temporary
shortages of commodities and hence result in drastic changes in their prices in a
very short time) forward futures trading involved a passage of time between
entering into a contract and its performance making there by the contracts
susceptlple to risks uncertainties etc.
Hence, it is necessary that the investors/players in the commodity markets
understand the functioning of commodity markets, mechanism o commodity
exchanges. Properly and study the factors that can affect the commodity prices
carefully.

3.10 CONCLUSION:
From the study it can be concluded that Commodities are basically the product of
primary sector of an economy primary sector of an economy is that part of the
economy which is concerned with agriculture and extraction of raw material.
Commodity market is a place where trading in commodities takes place. It is
similar to an equity market but instead of bulling or selling shares one buys or
sells commodities.

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CHAPTER IV
DATA ANALYSIS AND INTERPRETATION
4.1

INTRODUCTION:
After collection of data the next important step is Analysis of data. In analysis of
data, researcher has used various statistical tools like tables, charts, and diagrams
etc. The Analysis of data accomplished with the help of primary & secondary
data. This chapter gives the various types of information to the entire project. This
is essential for the study and for ensuring that the researcher has all relevant data
for making contemplated comparison and analysis.

4.2

DATA ANALYSIS:
For the purpose of analysis of data, research has used various statistical as
well as analytical tools like tabulation, percentage and ranking method. After
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collection of data, the next and more important step is analysis of data. Analysis
of data in s general way which are performed of closely related operation which
are performed with the purpose by summarizing the collected data and organizing
these in such manner that it answers that research question.

Table No. 4.2.1: Gender Wise Analysis:

Following table shows that gender wise distribution of investors.
Sr. No.
1
2

Gender
Male
Female
Total

Frequency
42
13
55

Percentage
76
24
100

(Source: Primary Data)

Interpretation:
Above table shows that, out of 55 investors42 investors are male and 13 investors
are female.
Thus is found that majority of investors are male respondents.
Graph No. 4.2.1. Gender Wise Analysis:
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Gender wise Analysis

45
40
35
30
25
No of Investors 20
15
10
5
0

Frequency

Male

Female

Gender

Table No. 4.2.2

Age Wise Analysis:
Following table shows the number of investors appears in the various age groups.
Sr. No.
1
2
3
4
5

Age Groups
Below 20 Years
21 30
31 40
41 50
50 Years & Above
Total

Frequency
1
21
19
11
3
55

Percentage
2
38
35
20
5
100

(source: primary Data)

Interpretation:
Above table indicate that, the 21 investors are from 21 30 of age group.
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And 3 investors are from 50 years and above.

Thus, it is found that majority of investors are between the age group of 21-30
years
Graph No. 4.2.2 Age Wise Analysis:

Age wise Analysis

Below 20 Years
5% 2%

21 30

20%
38%

31 40
41 50
50 Years & Above

35%

Table No. 4.2.3

Occupation Wise Analysis:
Following table shows the number of investors appears in the various Occupation
Sr. No.
1
2
3
4
5

Occupation
Professional
Business
Self employed

Housewife
Others
Total

Frequency
13
14
14
7
7
55

Percentage
24
25
25
13
13
100

( source: primary Data)

Interpretation:
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The Above table shows the occupation of investors. 14 investors are businessmen
and Self employed 13 investors are Professional while 7 investors are of other
sectors.
Thus, it is found that majority of investors their occupation in Salary(self
Employees.
Graph No. 4.2.3 Occupation Wise Analysis:

Occupation Wise Analysis

No of investors

14
12
10
8
6
4
2
0

Frequency

Occupation

Table No. 4.2.4

Income Wise Analysis:
Following table shows the number of investors appears in the various Income
Sr. No.
1
2
3
4
5
6

Income Group
Below 1 Lac
1-2 Lac
2-3 Lac
3-4 Lac
4-5 Lac
Above 5 Lac
Total

Frequency
5
8
17
11
6
8
55

Percentage
9
15
30
20
11
15
100

( source: primary Data)

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Interpretation:
Above table shows that 8 investors are having annual income of 5 lacs and
above.11 investors are having annual income of 3-4 Lacs and 17investors are
having annual income of 2-3 Lacs.
Thus, it is found that majority of investors their Income Level is (2-3 Lac)
Graph No. 4.2.4 Income Group Wise Analysis:

Income Wise Analysis

Below 1 Lac
15%
11%
20%

9%

1-2 Lac
15%

2-3 Lac
3-4 Lac

31%

4-5 Lac
Above 5 Lac

Table No. 4.2.5

Analysis of Percentage of investment:
Sr. No.
1
2
3
5

% of Income
Below 10%
10%-15%
15%-20%
25%-above
Total

Frequency
5
26
18
6
55

Percentage
9
47
33
11
100

(source :Primary Data)

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Interpretation:
The table shows that the 26 investors would like to invest 10%-15% portion of
their income in commodity. The 18 investors would like to invest15%-20%
portion of their income in commodity and only 5 investors would like to invest
10% portion of their income in commodity
Graph No. 4.2.5 percentage of Investment:

Percentage of Income
30
25
20
No of investors 15
10
5
0
Below 10%

Frequency

15%-20%

Income

Table No. 4.2.6

Analysis of investors of commodity market:
Sr. No.
1
2

Awareness
Yes
No
Total

Frequency
45
10
55

Percentage
82
18
100

( source : primary Data)

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Interpretation:
Above table shows that, out of 55 investors 45 investors are aware about
commodity market.
Graph No. 4.2.6: Investors of Commodity market:

Investors of commodity market

50
40
30
Frequency

No of investors 20
10
0
Yes

No

Commodity

Table No. 4.2.7

Analysis of Preferred Commodities:

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Sr. No.
1
2
3
4
5
6
7
8
9

M.B.A PROJECT

Commodities
Bullion
Metal
Energy
Agriculture
Bullion&Agri
Metal&Agri
Bullion,Metal,Agri
Metal&Energy
Bullion&Metal
Total

Frequency
6
10
1
4
9
6
2
4
3
45

Percentage
14
22
2
9
20
14
4
8
7

100

( source :primary Data )

Interpretation:
Above table defines the out of 45 investors 10 investors are preferred Metal.9
investors a used Bullion and Agri commodities and only 4 investors are preferred
Energy for investment purpose

Graph No. 4.2.7: Preferred Commodities

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Prefered Commodities

No of investors

10
9
8
7
6
5
4
3
2
1
0

Frequency

Commodity

Table No. 4.2.8

Analysis of Return on Investment:
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Sr. No.
1
2
3
4
55555

M.B.A PROJECT

Return
Below 5%
5-10%
11-15%
16-20%
More than 20%
Total

Frequency Percentage
1
2
7
16
17
38
14
31
6
13
45
100

(Source: primary Data)

Interpretation:
This table shows that the percentage of return from Commodity Market 17
investors get 15% return, 14 investors to in 20% and7 investors get 10% return in
their Commodity Market
Graph No. 4.2.8: Analysis of Return on Investment:

Analysis of return on Investment

No of investors

18
16
14
12
10
8
6
4
2
0

Frequency

Return

Table No. 4.2.9

Investment Wise Analysis:

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Sr. No.
1
2
3
4

M.B.A PROJECT

Investment Duration
Intraday trading
Short Term Investment
Long Term Investment
All of these
Total

Frequency
18
6
10
11
45

Percentage
40
13
22
25
100

( source :primary Data)

Interpretation:
This table defines the Investment Duration of commodity market. Out of 45
Investors 10 have used the Long term Investment duration. And remain 18
Investors have used the intraday trading and 11 investor has used the all of this
Investment duration.
Graph No. 4.2.9: Investment Wise Analysis:

Investment wise Analysis

20
15
10
5
0
Frequency

No of investors

Investment duration

Table No. 4.2.10

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Analysis for Purpose of Investment:

Sr. No.
1
2
3
4
5
6
7
8
9

Purpose of Investment
Hedging
Return
Speculation
Long term Invesment
Business
High Return
Hedging &Return
High Return&Hedgeing
speculation& Business
Total

Frequency Percentage
3
7
12
27
0
0
3
7
3
7
10
22
6
13
6
13
2
4
45
100

(source: primary Data)

Interpretation:
This table includes the reason for choosing commodity market. 12 investors are
having Return as their purpose of investment in commodity. 10 investors are
having High returns
As their purpose of investment and 6 investors are having Return and Hedging as
their purpose of investments

Graph No. 4.2.10: Purpose of Investment:

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Purpose of Investment
14
12
10
8
6
4
2
0

Frequency

No of investors

Investment

Table No. 4.2.11

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Duration of Investment:
Sr. No.
1
2
3
4
5

Duration
Below 1 year
1 - 2 year
25
57
7 Years & Above
Total

Frequency Percentage
1
2
9
20
20
44
10
22
5
12
45
100

( source : primary Data)

Interpretation:
Above table shows that the 20 investors are doing trading for 2 - 5 years, 10
investors are doing trading for 5-7 years.
Graph No. 4.2.11: Duration of Investment:

Duration of Investment
20
15

No of investors

10

Frequency

5
0
Below 1 year

25

7 Years & Above

Duration

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Table No. 4.2.12

Source of awareness about commodity market:
Sr. No.
1
2
3
4

Information Source
T.V.
Friend
Brokers Tips
Advisor
Total

Frequency Percentage
5
11
5
11
32
71
3
7
45
100

( source : primary Data)

Interpretation:
Above table shows that the media used by the investors to get acquaintance about
Commodity Market. 32 investors have used the Brokers tips & the5 investors
have used the TV and Friend to get information about Commodity Market.
Graph No. 4.2.12: Source of awareness about commodity market:

Source of Awareness about Commodity market

No of investors

35
30
25
20
15
10
5
0

Frequency

Sources

Table No. 4.2.13

Analysis of investment in future about commodity market:
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Sr. No.
1
2

Investment
Yes
No
Total

M.B.A PROJECT

Frequency
36
19
55

Percentage
65
35
100

( Source : Primary Data)

Interpretation:
This table defines the future

Investment of commodity market. Out of 55

Investors 36 investors are interested to investment in commodity market.

Graph No. 4.2.13: Analysis of investment in future about commodity market:

Investment In Future
40
30

No of investors

Frequency

20
10
0
Yes

No

Investment

Table No. 4.2.14

Analysis of Ranking of Investment:
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Sr. No.
1
2
3
4
5
6
7

M.B.A PROJECT

Ranking of Investment Weighted Score

Mutual Funds
253
Shares
244
Insurance
254
Equity
259
Bank FD
229
Commodity Market
238
Others
139
Total
1616

Rank
3
4
2
1
6
5
7

(Source: Primary data)

Interpretation:
From the above table it can be concluded that 259 investors give first rank to
Equity, further 254 investors ranked second for Insurance followed by Mutual
Funds their preferred investment.
Graph No. 4.2.13: Analysis of Ranking of Investment:

Ranking of Investment

No of investoors

300
250
200
150
100
50
0

Weighted Score

Rank

CHAPTER V
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FINDINGS AND SUGGESTIONS

5.1

INTRODUCTION:
The researcher has analyzed the data by using various methods and made
interpretation. The researcher has drawn some conclusions and suggestions with
the help of analysis and interpretation.

5.2

FINDINGS:
Researcher has made certain conclusions and is mentioned as follows:
1) The highly income group investors mostly invest their money in commodity
market. Commodity market is the beneficial for the investors to get return and
hedging.
2) The maximum Investors would like to invest their money in metal, Bullion as
well as Agricultural commodity.
3) The MCX commodity exchange is more profitable to the farmers.
4) The Investment in Commodity Market is very risky.
5) The Self-employed and Businessman intended to invest their money in MCX
commodity exchange.
6) It has been found that out of 55 investors only 13 are female investors.
7) Price movements in commodity market are purely based on the supply and
demand.
8) Investors are giving more preference to share, FD, Equity, Insurance, Mutual
Fund than Commodity.
9) Farmers can protect from future losses by hedging his product in commodity
market
10) Due to lack of knowledge and less popularity about commodity market
investors is less in this segment.
11) The out of 55 investors in that only 45 investors are aware about commodity
market.

5.2 Suggestions:
1) There is a scope to conduct an awareness programme for the Investors about
the commodity market.
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2) In rural area there are large scopes for different agricultural commodities and it
helps to increase their monthly or annual income and also their life style.
3) Organization should take initiative towards marketing and promotion activities
to penetrate in investment industry.
4) Highly income people are mostly invested their money, so company should
also give more information about various income group investors through
pamphlets broacher, advertising to rural people who do not aware about
commodity market.
5) The company should offer promotional policies or strategies and conduct
training to their dealers because trained and motivated dealer will peruse
people and they will give total information about commodity market to people
so it will be resulted into increasing the awareness of peoples about
commodity market.

ANNEXURE
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QUESTIONNAIRE

1. NameAddressMobile No
Email idGender-

a) Maleb) Female-

Marital status-

a) Marriedb) Unmarried-

2. No. of Dependantsa)

b)

c)

d)

e)

5 & Above

3. Age Groupa) Below 20 year-

b) 21 to 3 year

c) 31 to 40 year-

d) 41 to 50 year-

e) 50 & above-

4. Occupationa) Professional-

b) Business52
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c) Self employers

d) House Wife-

e) Other5. Income Group per yeara) Below 1 lac-

b) 1-2 Lac-

c) 2-3 Lac-

d) 3-4 Lac-

e) 4-5 Lac-

f) above 5 lac-

6 .What are your investment options?

a) MF-

b) Share-

c) Bank FD-

d) Commodity Market-

e) Insurance-

f) Equity-

g) Other7. How much portion of your income you would like to invest?
a) Below-10%

b) 10-15%

c) 15-20%

d) 25& above

8. Are you aware of commodity market?

a) Yes-

b) No-

9. Are You Investing in Commodity Market?

a) Yes-

b) No-

10 .If yes which type of commodities you preferred?

a) Bullion-

b) Metal-

c) Energy-

d) Agriculture-

11. What is the percentage of return?

a) 0- 5%

b) 5- 10%
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c) 10- 15%

d) 15-20%

e) More than 20%

12. What is the frequency of your Trading?
a) Daily

b) Long term

c) Every season
13. Which commodity exchange you preferred?
a) MCX

b) NCDEX

c) NMCE

d) NSEL

e) All of these
14. How is risk associated with commodity market?
a) Less Risky-

b) Very Risky-

c) Risky15. What are the preferred mediums for investing in commodity market?
a) Intraday trading-

b) Short term trading-

c) Long term trading16. Reason for choosing Commodity Market?

a) Hedging-

b) Return-

c) Speculation-

d) Long term investment-

e) Business-

f) High Returns

17. For How many years you are doing trading?

a) Below 1 years

b) 1-2 years-

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c) 2-5 years-

d) 5-7 years-

e) 7 year& above18. From where do you get information regarding Commodity Market?
a) Friend

b) Advisor

c) Brokers tips

d) T.V

19. Are you satisfied with Geojit Services?

a) Yes

b) No

20. If yes, then What kinds of services are rendered by Geojit in commodity?
a) Extra margin

b) demat convertibility

c) Agricommodity delivery

d) Trading tips

21. Would you like to invest in commodity market in future?

a) Yes

b) No

22. if yes, from which commodity would you prefer to invest in future?
a) Bullion

b) Metal-

c) Energy-

d) Agriculture-

23. From which broking firm?

a) Geojit BNP Paribas

b) Share khan

c) Religare

e) India infulience

24. Overall remark about Commodity Market?

BIBLIOGRAPHY
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1) Commodities Market Module Work Book (NSE Certification in Financial Market)

2) C. J. George (4th,Julys 2010): Geodata Geojit Financial Services Ltd., Kochi.
(Vol. 2/Issue: 4), p. 24
3) http://www.geojitbnpparibas.com/AboutUs/AboutUsMain.aspx
24th July 2011; at 2:30 pm
4) http://www.mcxindia.com/aboutus/aboutus.htm
5) http://ncdexindia.com/index.php/category/agricultural-products
2nd August 2011; at 1:30 pm

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