National Spot Exchange Launches e-Zinc
National Spot Exchange (NSEL), the pan-India electronic spot market for commodities, has launched e-Zinc contracts under its e-Series products with effect from January 14, 2011.
NSEL’s e-Series products, which are commodity investment products in demat form, were introduced in 2010 to meet the growing demand of retails investors to invest part of their savings in commodities. The launch of e-Zinc will now enable retail investors to put their small savings into Zinc, even in denominations as small as 1 kg. The settlement will be on T+2 basis, just like other e-Series contracts of NSEL.
Transparent pricing, seamless trading and zero holding cost make e-Series products very attractive to investors. Moreover, e-Series products are offered to retail investors at the same price across the country with the option of physical delivery, which have resulted in e-Gold, e-Silver and e-Copper becoming benchmark (in pricing) for the physical commodity.
NSEL’s e-Series products have even surpassed the returns of many other investment products and witnessed a huge increase in turnover. Buoyed by this success, NSEL had earlier announced that it would add more e-Series products segment by the end of 2011.
At present, NSEL witnesses a turnover of around Rs. 500 crore per day in its e-Series segment. NSEL expects this turnover to double to around Rs. 1,000 crore per day by the end of 2011, given that all its proposed e–Series contracts would become operational by that time.
Mr. Anjani Sinha, MD & CEO, NSEL, said, “NSEL’s e-Series products are creating a niche market for investment products in the commodities sector. On account of their suitability in catering to investors’ appetite, they have been extremely successful. Now with the launch of e-Zinc, retail investors and HNIs can add another base metal to their investment portfolio. Given the huge success of the existing e–Series products, we plan to continuously add more commodities under the e-Series umbrella this year.”
In 2010, e-Series products have outperformed many other investment products, yielding better returns than equities and ETFs. While equities, as a measure of NIFTY, gave returns of only 17.30%, Gold ETFs gave around 21-22%. In comparison, e-Gold, which was launched on March 17, 2010, has given a return of more than 21% over a period of 10 months and e-Silver more than 62% in 9 months. Launched in November 2010, e-Copper has also not lagged behind, giving a return of 22% in just 3 months. One can, thus, expect e-Zinc to also yield similar returns for investors.
NSEL’s e-Series contracts are attracting large number of investors from across the country due to some inherent benefits. HNIs are parking 10-20% of their investments into e-Series with the aim of diversifying their portfolio. In case of small and retail investors, that e-Series are available in smaller denominations and they can invest in these just like any other SIP product on a daily, weekly or monthly basis, are a great attraction. Moreover, there is also no storage cost for e-Series.
Given the popularity and huge demand for e–Series, a large number of broking houses have been prompted to become members of National Spot Exchange. NSEL’s e-Series products also give them dual income opportunities. Not only can they earn substantial brokerage by connecting large number of investors to their clients, they can also earn substantially from DP-related services as every client is required to open a separate beneficiary account for investing in e-Series products.
In order to enable brokerages to be a part of this large market, NSEL has launched a membership drive till January 31, 2011, during which NSEL is offering an admission fee of Rs. 7.50 lakh for new members. NSEL has decided to revise its membership fee to Rs. 10 lakh for TCM (trading-cum-clearing) category after the membership drive ends on January 31, 2011.