Page 1 - MEX Express - Vol 6 Issue 1

Mercantile Exchange Nepal Limited
Invest - Trade - Earn
An ISO 9001:2008 Certified Exchange
KYC: Crude Oil
Page 2
From the CEO’s Desk
Looking at the pages of our glorious
past, I am extremely proud of
what we have achieved and even
more eager about our outlook for an
equally promising future. As we step
into the 6th year of our operations,
we have successfully transformed
from a start-up to becoming, without any exaggeration,
the leading commodity exchange in the country. This
accomplishment has been the concentrated effort
of all the stakeholders involved and has placed the
organization on a pedestal, building our clients trusts
along the way while garnering business across the
nation. While conveying the success story of MEX, I
always fall back on three guiding principles- each of
which has helped define who we are today.
Transparent Perspective: As we continue to tread on
a given path, each new day offers new chance for us
to grow together, pursue opportunities and improve
upon the past. We have always maintained in-
depth relationship with our clients by studying their
environments, challenges and goals, so that we can
offer tangible solutions with a candid perspective. We
have and will always manage our business around the
evolving requirements of our clients thereby being at the
forefront of change and value - since value is what our
clients demand.
Impeccable Mechanism: In an evolving marketplace,
the mechanism has been constantly developed with
due diligence keeping in mind the needs of the market
participants. With the introduction of Market Makers,
the market has received a thrust and the liquidity has
enhanced significantly. The exchange is also constantly
reviewing policies and procedures, and upgrading it to
the best of our times. I must admit that no mechanism is
perfect and there will always be loopholes which can be
addressed and rectified yet the mechanism which we are
currently following is nearing perfection and we plan to
keep the ball rolling to attain it in the ensuing days.
Competent Employees: The most important assets
which have brought the exchange through all the
hurdles thrown have been the competent employees.
With the extensive knowledge base, deep-rooted
professionalism and unwavering commitment of our
highly-qualified staff, the exchange has always stood the
test of time and moved ahead with dignity and a sense
of enthusiasm unmatched in many ways. Our team is
always committed to delivering highest products to our
clients and unparalleled services too.
As I conclude this message, I am taken aback by the past
accomplishments but a sudden realization dawns on me-
to accomplish further, we cannot remain stagnant! The
best is surely yet to come!
- Jitesh Surendran For example, development of Chinese
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MEX News Portal Volume: 6 • Issue: 1 • Year: 2014 A.D
Page 3 Market Perspective
Page 4
Metal: Trendish in 2014
Metals are one of the major
commodities that are traded
in the exchanges all around the globe.
In the commodity markets, metals are
very luring for the investors. The reasons
for the higher demand of the metal
commodities are the higher values of the
commodities and comparatively easier
analytical forecast. Usually, metals can
be divided into: Precious Metals and Base
Metals (Industrial Metals). The examples
of Precious Metals are Gold, Silver,
Platinum, Palladium, etc. whereas the
examples of base metals are copper, zinc,
nickel, aluminum, etc.
When the world came across the It would be interesting to know that period, but they remain near their 10-year
global financial crisis during 2008/09, the the recent data show Nickel as the most peaks. Stocks of copper, lead, tin and zinc
prices of not only metals, but many others traded metal commodity in the world. are all down (approximately 30 percent
collapsed. By now, most of the prices have How did it happen that Nickel emerged each) over a year ago, but nonetheless
revived already and few are very close to being so special for the commodity market remain well above their 10-year averages.
doing the same. It was already in February overtaking Gold or Platinum? The major
of 2011 when the World Bank metals reason why Nickel emerged up in the Though metal prices went down by
price index increased by 164 percent to market was the Indonesia’s imposition of almost 5 percent in 2013, which was the
reach the value of 126 in comparison to an export ban on unprocessed ore which result of supply concerns and weaker
the low of December 2008. There were was adopted in January 2014 also being demand; the results might show difference
several increases as such with major escalated by the concerns over Russian in 2014. Though silver prices showed a
commodities before the complete revival supply activities. These two countries decline of 1.5 percent, the increment in
from the financial crisis. Investments hold around 40 percent of the mined gold and platinum prices have covered it
already increased and there was strong nickel in the world which is the most up. Gold prices, though being volatile look
supply response of the commodities which important ingredient for the steel-making. to show some bullish signals according to
justified that the increment observed Commodity Market Outlook in April the report. Similarly, never ending labor
was sustainable. The decline was very states “China relies heavily on Indonesian strikes in South Africa look to escalate the
worrisome upto the start of 2011 but the nickel ore to produce nickel pig iron, a less Platinum prices in the market.
institutions and the countries had already expensive alternative to refined nickel. If
started the counter measures by then the Indonesian ore supply is permanently Besides that, resolution of India’s
which demystified the effects of financial removed from the market, China will be limits on gold imports to check its current
crisis. The major portion of the increased forced to substitute with higher-grade account shortage and China’s efforts to
supply of the metal was for the massively metal, which could dramatically change adjust its “shadow banking” system might
growing China whose consumption share the market which has been plagued with put extra sliding pressure on prices, given
reached to 45 percent. Upto last year, the chronic stocks and over-supply since the that gold has been used as a security in
share was only around 42 percent whereas financial crisis in 2008.” financing deals.
upto two decades back, the consumption
share was only 5 percent. Presently, the stockpiles of the metals Chittaranjan Pandey
have gone down in major exchanges,
From the above discussion, we can only by 0.5 percent though, but if the Assistant Manager
see that the decline in the price level historical standards are seen, the levels Research & Development
halted after a certain time but it was very can be interpreted as going up. For MEX Nepal
unfortunate that the halt did not last long example, nickel stocks are up 72 percent
and the coming to 2014, the decline in at end-2014Q1 (y/y). Aluminum stocks,
the World Bank metals price index came which have been rising since end-2008,
down by 3 percent. During the first quarter increased just 0.2 percent during the same
of 2014, when the price declined, it was
obvious that Chinese imports slowed
down significantly. Besides that, the
lowering of investment activity trying to
cash-in the booming property market also
posed a serious threat to the price level.
imports of aluminum, zinc, copper and
iron ore has braked to zero or turned
destructive in three months to February
after facing growth rates in excess of 50
percent in three months to November.
The Commodity Outlook Report shows
that prices for lead, tin, copper, aluminum
and iron ore declined 0.6, 1, 2, 3 and 11
percent respectively. Exceptions to this
trend were nickel and zinc whose prices
increased (up 6 percent each).
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