Volatility in Indian Stock Market Ppt - PDF

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					 Gold and Silver
Indian Scenario
  Bhargava Vaidya
    24/08/2007



   B. N. VAIDYA & ASSOCIATES
        India Market Status

              Physical Market
• Only OTC
                   Futures
• Active On Local Exchanges
        MCX Lion share

• Forward - very small (OTC)
              B. N. VAIDYA & ASSOCIATES
    Driving Factors - (India)- I
• International Price
• Government Supply
• Festive demand ??
• Scrap Supply ????
• Interest Arbitrage / LC Imports
• Taxes Levies and Conditions
                  B. N. VAIDYA & ASSOCIATES
  Driving Factors - (India) - II

• Festival Buying
• Marriage Buying
• Collection for Future
• Investment Buying
  - Harvest
   - Gold / Silver swap ???


                B. N. VAIDYA & ASSOCIATES
Driving Factors - (India) - III

            Indian Bullion Market

• Volatility Sensitive
• Gold Price Sensitivity
• Silver Price Sensitivity



                 B. N. VAIDYA & ASSOCIATES
     Factors Affecting Gold - I
              TRADITIONAL
• USD – Currency inverse relation
• GEO POLITICAL SITUATION
- Safe Haven Status

• MINERS HEDGING POSITION

• CENTRAL BANK's ACTIVITIES
               B. N. VAIDYA & ASSOCIATES
   Factors Affecting Gold - II

                  NEW
                Media Role
• HEDGE FUND ACTIVITIES
• ETFs
• NEW INVESTOR CLASS
 - in mines , in metals
• DERIVATIVES RELATIONS
              B. N. VAIDYA & ASSOCIATES
             Gold Imports

• Restricted Through
   Nominated Banks
   Nominated Government Agencies
   Select Category of Exporters
• ADVANTAGEOUS
   Numbered bars
   Weight in metric

               B. N. VAIDYA & ASSOCIATES
       Private Sector Supply
• Location Friendly

• To Improve Service

• Two way Trade possible

• To Integrate Bullion players with
 International Market
               B. N. VAIDYA & ASSOCIATES
        Gold Exports-India

• Can Bullion Be Exported ????
• Imported Bars Re - Exported
• Value Addition Norms
 - Jewellery Plain Gold :
           Hand made, Machine made
 - Jewellery Gold Studded
 - Articles and Medallions
             B. N. VAIDYA & ASSOCIATES
Gold Loan (India)

• Domestic
      Restricted to 180 days



• For Exports
   Maximum 270 days
      Direct supplier list restricted
                B. N. VAIDYA & ASSOCIATES
       Supply Gold - (India)
• FRESH IMPORTS                          68 %
 - Sales
 - Loans
• SCRAP RECYCLING            30 %
• OTHERS                        2%
   - Government Supply
   - Domestic Loans / Others
   - Forwards ??
             B. N. VAIDYA & ASSOCIATES
           Demand - Gold

Factors driving Demand

• Marriage / Festival Season
• Gifts - Corporate
• Investment outlook
• Status of economy (Rural)
• New Products – ETF’s
               B. N. VAIDYA & ASSOCIATES
       Demand Gold – (India)

• Jewellery                                    60%

• Investment (Incl. Crude Jewellery)           32%
   - GAP / Collection /Coins
    - Returns related Investment
• Industrial/Coins Gifts } 8%
• ETF & Exchange Related      }

                   B. N. VAIDYA & ASSOCIATES
           Demand - Gold

Factors deterrent to Demand

• Price Volatility
• White Goods
• Price
• Economic Conditions (Rural)
• Paper substitutes
              B. N. VAIDYA & ASSOCIATES
    Demand for Exports - Gold

• Jewellery

• Industrial

• Other Trading / Investment

        BASE STOCK REQUIREMENT
               B. N. VAIDYA & ASSOCIATES
    Factors Affecting Silver - I

               TRADITIONAL
• Gold - Relation
• Base Metal - Relation

• By - Products Position

• Industrial Demand
               B. N. VAIDYA & ASSOCIATES
   Factors Affecting Silver - II

                  NEW
                Media Role

• Hedge Fund Activities
•ETF
• Derivatives Relations
• Chinese Factor
              B. N. VAIDYA & ASSOCIATES
             Supply Silver
• Imports                                  55% –
 75 %

• Scrap / Disinvestment                   20% - 40%

• Government Supply                       1% -
 30%

   In past India - Net Exporter of silver
              B. N. VAIDYA & ASSOCIATES
           Demand - Silver

• Silverware
• Jewellery
• Coins – Investment Bars

• Industrial



               B. N. VAIDYA & ASSOCIATES
          Demand - Silver

Factors driving Demand
 - Industrial almost steady
• Price
• Economic Condition (Rural)
• Festivals
• Positive Price forecast

              B. N. VAIDYA & ASSOCIATES
       Investment Avenues

• Physical                   (India – Y)
• Depositary / D –mat        (India - ? )
• Unallocated                 (India - N)
• ETF                          (India – Y)
• Futures / Forwards         (India - Y)
• Options                      (India - N)
• G.A.P.                        (India - ? )
              B. N. VAIDYA & ASSOCIATES
      Industry Target - India

• Make India No. 1 Bullion Dealing Center

• Price Discoverers
• Chanelise Huge Reserve Stock of Gold
• Clearing House of the World


               B. N. VAIDYA & ASSOCIATES
    TARGET 2010

       INDIA
         A
       MAJOR
BULLION & JEWELLERY
        HUB
      B. N. VAIDYA & ASSOCIATES
B. N. VAIDYA & ASSOCIATES

				
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