Next bull run in commodities, say experts

Stock markets are shining the brightest in the investors' world at the moment, but going forward, the commodity market is likely to steal the limelight with the "next bull run", say experts.

"It (commodities) is a virgin market, but has the potential to grow 50 times more than where it is now. The next bull run is not in stocks, not in bonds, but in commodities," National Commodity and Derivatives Exchange (Ncdex) Managing Director and CEO P H Ravikumar said.

Every investor wants to hold a Reliance or a Infosys share but not a commodity futures contract, he said, adding investors have not explored the commodities market as yet.

The industry players believe the stock market growth has been led by huge inflows from foreign investors, banks and other large investors and the same is needed to propel the commodity market into its next growth orbit.

"Investors must realise that Sensex touched 17,000 level because of higher foreign institutional investment (FII) inflows. Unfortunately, FIIs, banks and non-resident Indians are not allowed in commodities market. Without big players, investors cannot see the real depth and action that they have been seeing on Sensex," the Ncdex Chairman said. Brokerage firm Religare's commodities head Jayant Manglik said this relatively new market has a potential to grow like stock exchanges.

"In 2006-07, volumes grew over 25 per cent to Rs 27,39,340 crore, while BSE and NSE together contributed about Rs 28,00,000 crore. The five-year old commodities market is capable of toppling these figures in the years to come," he added.