Opportunities for Foreign Institutional Investors, Indian Banking Industry and Mutual Funds in Commodity market

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Opportunities for Foreign Institutional Investors, Indian Banking Industry and Mutual Funds in Commodity market

Dissertation Writing Help on 

Opportunities for Foreign Institutional Investors, Indian Banking Industry and Mutual Funds in Commodity market

Thesis on 

Opportunities for Foreign Institutional Investors, Indian Banking Industry and Mutual Funds in Commodity market

2. Area of Research:  Commodity Market

3. Title of the Thesis:

“Opportunities for Foreign Institutional Investors, Indian Banking Industry and Mutual Funds in Commodity market”

4. Hypothesis:

The participation of Foreign Institutional Investors (FIIs), Banks and Mutual Funds (MFs) will enrich the commodity derivate markets by boosting liquidity and turnover volumes and they  will provide the much wanted breadth and depth to these markets. It will also provide better diversification avenues to the institutions.

5. Scope of Thesis

This study argues that if the institutional investors are allowed to operate in all the products of the commodity derivative markets, it has implications for both the liquidity and broad basing of commodity derivatives markets given the assets under management of these investors. Their entry into commodity derivatives markets is also expected to benefit them given the portfolio diversification opportunities. This study discusses the implications of the grant of permission to these institutional investors to operate in commodity derivative markets.

6. Research Methodology: Data Collection and Analysis

1) Surveys & questionnaire

2) Internet

3) News Papers

4) Business Magazines/Journals

5) Finance Books

Selection of the Survey Sample:

A semi structured questionnaire will be administered to 25 respondents who are investor’s in commodity markets. These investors are members visiting the Angel broking house for regular trading. The survey intends to extract the investor’s investment patterns and their opinion on institutional investors’ participation in commodity market.

7. Justification for choosing a particular research proposal:

The Government of India recognised three nation-wide multi commodity exchanges- MCX, NCDEX, and NMCE - to promote a healthy, competitive futures market. It was rightly presumed that there is room for multiple players to grow in size and stature in the huge commodity economy of India.

 Investment in commodity derivatives markets is indeed a better investment option for institutional investors as it is found that the return on investment from debt markets is affected by inflation rates whereas this is not the case with commodities derivatives markets, which are positively correlated with inflation. By allowing institutional players to penetrate into commodities, it is expected that the markets would become more vibrant thereby boosting liquidity and improving the volumes manifold.

Commodity derivatives will enable banks and mutual funds gain exposure to alternative investments. Exposure to commodity-linked products will increase a portfolio's risk-adjusted returns.

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