Commodity trading volumes fall sequentially, equity derivatives trading grow 6% in August

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The trading volumes on Indian stock and commodity exchanges declined sequentially in August 2021 for the commodity segment while equity derivatives grew 6 percent and the cash segment remained flat.

In the cash segment, the National Stock Exchange (NSE) registered an ADTV (average daily turnover value) of Rs 62,900 crore in August 2021 as compared to an average of Rs 70,400 crore between April-July 2021. BSE’s cash ADTV during the month fell 6 percent, MoM, to Rs 5,200 crore, according to ICICI Securities report.

However, on a YoY basis, NSE and BSE ADTVs rose 3 percent and 17 percent, respectively. NSE’s market share in the cash segment stood at 92 percent in August.

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In the equity derivatives segment, NSE witnessed sequential improvement, while BSE ADTV remained flat. NSE’s total equity derivatives’ ADTV in August rose to Rs 60 lakh crore from Rs 57 lakh crore in July. NSE options’ and futures ADTV grew 7 percent each sequentially to Rs 56.3 lakh crore and Rs 1 lakh crore, respectively.

BSE’s options’ ADTV remained flat MoM at Rs 3 trillion for the month.

In the commodity derivatives segment, the ADTV of India’s largest commodity exchange, Multi Commodity Exchange (MCX) fell 8 percent, MoM, to Rs 25,000 crore. It was down 42 percent YoY.

“The sharp decline in ADTV was led by gold (down 16 percent MoM), crude (down 13 percent MoM) and copper (down 11 percent MoM). Drop in gold and copper ADTV is largely attributed to falling in volumes traded on the platform while the drop in crude ADTV resulted equally from a drop in both prices and volumes,” the report said.

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Meanwhile, commodities that reported MoM gains were silver, due to the increase in volumes traded, and natural gas due to higher prices.

MCX commodity options ADTV has seen good traction in the past three months led by a strong pick-up in crude option volumes. MCX options ADTV for the month came in at Rs 6,050 crore versus Rs 1,500 crore / Rs 2,000 crore / Rs 2,300 crore / Rs 4,600 crore seen between April and July (mainly crude).

At the August 2021 rate, options will contribute around Rs 1,750 crore to MCX annual revenues, the report said. MCX indices futures continued to see an MoM decline in their ADTV despite cross margin regulation.

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In the currency derivatives trading, BSE saw a sequential improvement in its market share as NSE’s share fell to 69 percent in August from 73 percent, MoM.

NSE and BSE’s currency derivatives’ ADTV grew 16 percent and 11 percent YoY to Rs 53,800 crore and Rs 23,900 crore, respectively. On an MoM basis, NSE declined 18.5 percent while BSE’s reported ADTV remained flat.

Mutual fund trading data saw a surprise dip for BSE market share. Value-based split of transactions on exchanges was at 63 percent for BSE in August versus an average of 71 percent in FY22-TD.

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The number of orders processed on BSE’s mutual fund platform grew 93 percent YoY to 14.1 million in August. NSE posted 81 percent YoY growth under the same parameter to 2.8 million.

On the depositories front, data till July 2021 shows Central Depository Services Ltd (CDSL) and National Securities Depository Ltd (NSDL) market shares at 65 percent and 35 percent, respectively.

In terms of incremental accounts opened in FY22-TD, CDSL has maintained its dominant share of 88 percent versus 86 percent in FY22.