The National Commodity Exchange Limited (NCEL) has reflected remarkable growth this year with total traded volumes of approximately Rs 185 billion in 2010. The total volume last year was Rs 28 billion, which translates into an increase of 660 percent in traded volumes over last year. This exponential growth is achieved as more and more institutional and retail investors turn towards the commodity markets.
The addition of commodities in the investment portfolio offers an opportunity for diversification as well as hedge against inflation and the slow pace of the equities market. While the main focus still remains on gold trading, volumes have also picked up significantly in the silver and crude oil contracts. The gold contracts have shown marked increase from about 87,000 contracts in 2009 vis a vis approximately 642,000 contracts in 2010. This rise is on the back of increasing gold prices in the year and more reliability of Gold as a safe investment option with comparatively less volatility than equities.
During the year NCEL introduced new contracts of 1 tola gold and new products Crude Oil and Silver on the tradable commodities list. The addition provides further depth in the market and liquidity to its platform as well as creating new opportunities for trading and advanced hedging strategies. Another worthwhile addition was the launch of a Gold Fund with KASB Funds, which is the first of its kind in Pakistan.-PR
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