Indian Commodity Exchange (ICEX), the world's first diamond derivatives exchange, today said it has successfully completed first-ever diamond futures contracts settlement with the total traded quantity in November expiry for 5,382.08 carats valued at Rs 173.32 crore.
ICEX had commenced operations on August 28 with the launch of three monthly diamond futures contracts - of November 2017, December 2017 and January 2018 expiry, respectively.
"We have successfully completed first-ever diamond futures contracts settlement on November 3. The total traded quantity in November expiry since the launch of the contracts stood at 5,382.08 carats, valuing at Rs 173.32 crore.
Percentage of delivery against the total traded quantity has been 0.53 per cent," ICEX said in a statement here.
Total 1,440 clients participated in the delivery process and 26.27 carats of diamonds worth Rs 83 lakh were delivered. At present, around 40 carats of diamonds are lying in the exchange vaults, the release said.
During the time of expiry of the November 3 contracts, the spot and future price of diamonds converged, which is indicative of efficient price discovery of the underlying asset. The exchange had quoted Rs 3,166 per one cent as the price on "due date," while the three-day average of November futures closing price was Rs 3,168.33 per one cent, indicating a convergence between spot and futures price.
"During the expiry, we have seen a complete convergence of spot and futures price - one of the important features of derivatives market. All the open Interest positions towards contract expiry resulted into delivery. More than 1,400 clients participated in the delivery process, indicating a wider participation," ICEX MD & CEO Sanjit Prasad said.
A SEBI regulated commodities derivatives exchange, ICEX said that having a staggered delivery cycle, the tender and delivery process had started on 1st November. Both buyers and sellers completed their obligation towards settlement within the timeframe as per the exchange process. All the open interests during the period have resulted in delivery.
"For diamond manufacturers ICEX market is like a boon.
It has opened a new front for the industry in terms of investment market. At the same time, it matches the vision of the Prime Minister Narendra Modi of Make in India pricing where ICEX price is now replacing imported price," Surat Diamond Association chairman Dineshji Nevadia said.
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