| Commexes told to liberalise delivery format
MUMBAI: Commodity markets regulator Forward Markets Commission (FMC) has asked the futures exchanges to relax the delivery parameters and permit deliveries outside the demat format. Demat is a system where securities like shares, debentures and even commodity futures are converted from the physical form into electronic data and stored in the computers of a depository.
FMC chairman BC Khatua feels that the demat system is not ideal for commodities. He suggested that investors should be allowed to keep their material in their own godowns if they choose to do so. This could be either because they want to avoid the incremental costs of transferring to exchange-approved warehouses, or lack of storage space in exchange warehouses. Currently, this is not permitted by exchanges when deliveries have to be carried out.
Bad news belts CME
CME Group Inc., owner of Chicago's two globally dominant futures exchanges, is back at war with its biggest customers. The resumption of hostilities pushed its stock price down Wednesday by more than $100 per share, or 18 percent, wiping out more than $5 billion in market value. The Justice Department triggered the decline with a letter to the Treasury Department suggesting futures exchanges should not be allowed to clear, or guarantee, the trading within their systems. In-house clearing, the department said, chokes off competition by making it harder for exchanges to cut in on another's established turf, where the clearing function enjoys a low-cost advantage. The letter aligns with the view of Wall Street investment banks that have long wanted to take out the Chicago Mercantile Exchange and the Chicago Board of Trade and keep for themselves the fees they pay the exchanges.
CME bid spurs fears of merger monster
THE commodities boom is intensifying the merger mania among the world's financial exchanges. But the $US11 billion ($12.4 billion) bid by CME Group to acquire Nymex Holdings may fuel worries that consolidation is leaving the survivors with too much power. A purchase of the 135-year-old New York Mercantile Exchange's owner by CME, parent of the Chicago Mercantile Exchange, would create the largest exchange in the world, with a stock market value of about $US45 billion. And acquiring Nymex's crude oil futures, one of the largest commodity contracts in the world, would fill the last major hole in the 110-year-old Chicago exchange's product line-up, while squeezing remaining rivals in the energy market. The deal also highlights some unsettling consequences of the global scramble for alliances and market share in trading financial securities.
KCBT hits new total daily trade volume record
Kansas City Board of Trade hard red winter wheat futures established a new single day trading volume record Monday, February 11. This follows the Commodity Futures Trading Commission's decision to expand daily trading limits for wheat futures from $.30 to $.60. The KCBT, Chicago Board of Trade and Minneapolis Grain Exchange initially requested that limits be raised to $.40.
Total volume on Monday was 47,962 contracts, up 20.8% from the old record of 22,407 contracts set August 2, 2006. That includes a new all time top for electronic volume as well; that totaled 22,407 contracts, an increase of 37.9% from the previous top of 16,248 contracts set August 13, 2007.
Volume and interest at the three U.S. wheat exchanges has been up sharply for more than a year due to generally tight supplies and strong demand.
Adventurer Fossett declared dead
The 63-year-old went missing on September 3 after taking off in a single-engined plane from a Nevada airstrip. His wife had asked for him to be declared legally dead. The judge heard testimony from Mr Fossett's wife, Peggy, and a family friend, as well as from a search-and-rescue expert, before deciding there was sufficient evidence to declare him dead. Mr Fossett earned millions of dollars trading futures and options on Chicago exchanges. Attorneys representing his estate had filed a petition to have him declared legally dead so his assets could be distributed according to his will. Mr Fossett was a record-setting balloonist, sailor and pilot who completed non-stop flights around the world. Mrs Fossett's lawyer, Michael LoVallo, said: "It was very sad and at first she hoped and sort-of envisioned him walking down the road the next day with another story to tell.
US Commodities: Gold Up; Platinum Soars; Wheat Down Sharply
In grains trading, most wheat futures closed sharply lower Monday after the exchanges increased margins and daily trading limits and index funds began to roll positions out of nearby contracts, traders and analysts said. Minneapolis Grain Exchange March and May wheat were the exceptions, with the March contract soaring to the new, daily exchange-imposed limit of 60 cents. MGE May wheat ended slightly below limit-up. Chicago Board of Trade March wheat fell 45 cents to $10.48 per bushel. Kansas City Board of Trade March wheat dropped 56 1/2 cents to $10.83 3/4, and MGE March wheat surged 60 cents to $16.13. Activity was volatile after all three exchanges said late Friday they would raise their daily trading limits to 60 cents from 30 cents, effective Sunday.
Constitution ready for May referendum
MILITARY-ruled Burma has finished drafting its proposed constitution, which the junta plans to bring before voters in a referendum in May. "The state's constitution drafting commission has confirmed that the draft of the state constitution has been agreed upon by all commission members, after repeated discussions," Supreme Court chief justice Aung Toe said. "All members signed the draft of the constitution," said Aung Toe, who headed the drafting commission. The military earlier this month announced that it would bring the charter before voters in a referendum in May, which the junta says will set the stage for democratic elections in 2010. The opposition National League for Democracy has warned that Burma's rulers must first respect the results of 1990 elections, won by Nobel peace prize winner Aung San Suu Kyi, in order to move toward democracy.
Reign of Terror - The South Hill Rapist
The story: After 25-years in prison, convicted "South Hill" rapist, Frederick "Kevin" Coe, is scheduled to be released this September.Play slideshow: Launch In 1980, the city of Spokane lost its innocence. A rapist, preying mostly on woman living on the city's South Hill, had police frustrated as the mounting toll of victims began to attract media attention. The perpetrator was recast as the South Hill rapist and panic began to descend on the city. Finally in the spring of 1981 a break in the case led to the arrest of Frederick "Kevin" Coe whose father happened to be the managing editor of the Spokane Daily Chronicle newspaper. After two trials and having served 25-years in prison, Coe is scheduled to be released this September. Now state prosecutors are looking at filing a civil case that could keep Coe behind bars for the rest of his life.
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