With the launch of E Series of Products by National Spot Exchange Limited (NSEL) a new paradigm got opened for investors to invest in commodities in seamless manner as they do in equity market. NSEL launched E-Lead on 18th Feb 2011, lead backed investment instruments which is available to the investors. Now NSEL has five products in its E-Series basket that includes E-Gold, E-Silver, E-Copper and E-Zinc apart from E Lead.
Lead is an important metal having industrial application that reflects economic growth. On the back of strong global demand of lead its price is increasing and will continue so on increased industrial demand. Since 2010 the price of lead has consistently increased with appreciation of around 60%. The movement in the price of lead corresponds that of other base metals such as copper and zinc.
As such the lead metal is traded on different exchanges but no investment product based on lead is offered to the investors. National Spot Exchange is the first and only exchange in India and world to offer investment in lead through its E-Lead. So Lead which used to be absent in the portfolio of investors is now available to diversify their portfolio. E-Lead will enable those retail investors who prefer investing in commodity stocks with a view to gain benefits from the price appreciation.
The contract in E-Lead is available for trading on NSEL platform from Monday to Friday from 10.00 am to 11.30 pm. The trading unit for E-Lead is 1 unit, which is equivalent to 1 kilogram of Lead with the tick size of Rs 0.05/ unit. The clearing and settlement pay-in and pay-out are based on T+2 cycles and settled completely in demat form. In E-Lead contract, intraday trading is allowed but all open positions (buy and Sell trades) must result into compulsory delivery in demat form on the designated delivery day.
E-Lead units can be purchased through the members of the Exchange. Client is required to have demat account with any of the exchange empanelled depositories. Demat facility enables buying, holding and selling in seamless manner. There is no risk of commodity custody/theft. One can invest in E- Lead without the worry of excise duty, VAT and other tax liability.
NSEL launched India's first commodity investment product in demat under the aegis of 'E-Series' in March 2010 to tap the growing appetite of retail investors to put part of their savings into commodities. E-Series products are offered to retail investors in small denominations and at uniform price across the country with the option of physical delivery.
Since their launch, E-Series products have proven to be a great success for NSEL, owing to a huge response from retail investors, better returns compared to most other investment products in financial markets and a consistent rise in turnover. The NIFTY gave annualized return of only 6.5 % and some popular Gold ETFs around 21-22% if calculated during the period between the E-Series launch and the latest closing data available i.e. 17th Feb, 2011. However, in comparison, the E-Copper gave an annualized return of 88.4 %, followed by E-Silver, which gave 86.3%, E-Gold gave 24.35% and E-zinc returned 17.9%.
