Commodities hotter than blue chips

Investors seem to prefer the commodities exchange to the hackneyed stock exchanges, which is evident from the average daily turnover of bullion and agri-commodities vis-à-vis blue chip stocks.

The turnovers of gold, silver and agri commodities like guar seed and chana are much more than that of blue chips traded on the Bombay Stock Exchange.

In an analysis of the average daily turnovers of leading blue chip stocks and some major commodities, it is seen that the average daily turnover of chana futures traded at NCDEX was about Rs 399.46 crore (Rs 3.99 billion) in October so far, compared to the blue chip firm Reliance which grossed only Rs 131 crore (Rs 1.31 billion) as average daily turnover in the same period.

Interestingly, the total of the top grossing commodities chana futures, desi urad, guar seed amounts to Rs 876.83 crore (Rs 8.76 billion) in terms of the daily average turnover while the leading five blue chip firms -- Reliance, ONGC, Infosys, TCS and NTPC aggregated to a turnover of only Rs 274.20 crore (Rs 2.74 billion),

indicating a trend of aggressive investments by investors in the commodity markets.

"Commodity trading is more attractive than stock market as one needs to invest a small amount of margin money (as decided according to the commodity) as compared to stock market. And even the profit rates are also higher," Indiabulls commodity analyst Sumeet Kumar Patra told PTI.

An investor in the commodities market does not need to wait for the quarterly results of specific company as commodity is all about demand and supply and looking at these conditions, it is assumed to grow at higher rate, he added.