What could be the implications of the MCX launching a spot exchange in metals?
Answer
Answer
Multi Commodity Exchange of India of MCX India is planning to launch a spot exchange in base metals. This is likely to help in the development of the fragmented physical market and act as a back-up support to the delivery-based futures market.
The idea is that the spot market will provide the benchmark for Indian futures settlement instead of relying on the LME prices, which may not be reflective of Indian conditions. MCX has already created infrastructure and logistics to enable such.
MCX is also set to launch its second cash-settled index futures in base metals. This index will be called named Metaldex. This is the aftermath of the good response that MCX has received for its gold/silver combination index, the Bulldex.