Moneycontrol
Last Updated : Sep 19, 2018 11:42 AM IST | Source: Moneycontrol.com

MCX rallies as SEBI allows foreign investors to trade in commodity market

Reacting to the new rules, domestic brokerage firms, Motilal Oswal maintains a buy on MCX and with a target price of Rs 1000, which translates into an upside of about 27 percent from current levels.

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MCX rallied nearly 3 percent in morning trade on Wednesday after the market regulator, Sebi, said that it would soon come out with revised KYC norms for foreign investors and also overseas entities to trade in commodity derivative market.

With regard to the regulatory framework for permitting foreign entities, having actual exposure to Indian commodity market, to participate in the domestic commodity derivative market, Sebi said that such entities would be classified as Eligible Foreign Entities (EFEs).

EFEs are defined as persons who are non-resident Indians but have underlying commodity exposure to the country in the form of commodity import or export.

Reacting to the new rules, domestic brokerage firms, Motilal Oswal maintains a buy on MCX and with a target price of Rs 1000, which translates into an upside of about 27 percent from current levels.

“Sebi allow foreign entities to participate in the commodity derivative market. The move by the market regulator will increase liquidity and depth in far-month contracts,” said the report. It is aimed to encourage domestic firms to trade on Indian exchanges instead of overseas hedging.
First Published on Sep 19, 2018 11:42 am
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