More investors falling prey to commodities market
BIRGUNJ, SEP 10 -
About a dozen investors from Birgunj have been found losing millions of rupees after making investment on commodities markets.
One estimate puts the loss at as high as Rs 200 million in Birgunj alone in the last three years.
An investor from Kalaiya of Bara lamented that he had to sell his lands and properties after a loss in the commodities market. “I lost around Rs 7 million while trying to salvage the lost fortune,” said the investor requesting anonymity. He claimed that many investors from Marwadi community have also incur heavy losses while trading in the commodities market.
KP Agrawal, an investor from Adarshanagar who lost Rs 720,000 in the commodity market, claimed that none of the investors from Birgunj has made a profit from their investment in the last three years. “I could hardly sleep when I found prices of commodities I purchased on a free fall while watching television.”
He said that many youth entrepreneurs were attracted towards the commodities market in the initial days of the commodities exchange three years ago. He is content that he did not lose as much as some other investors did. “Despite being highly tempting, I have sworn never to return to the commodities market again,” said Agrawal, adding that he still has some money remained in his account.
In the wake of increasing complaints about losses, the number of broker firms has come down from three to only one—Norex Commodity Mart—in Birgunj.
“The market allows speculated investment on crude oil, gold, silver, cotton, several metals, wheat, seeds and natural gas, among others,” explains proprietor of Norex Pankaj Agrawal. He gains the commission based on the volume of investment.
Many investors assumed software malfunction as the cause of their huge losses. However, they also complained that the lack of legal provision has encouraged wrongdoing in the market. “The operator has been swindling money by manipulating the software to their benefit,” complained an investor, adding that even many of the big businesshouses have incurred huge losses.
Meanwhile, going beyond the domestic market, some of the local investors are found to have invested in the commodities market in the bordering Indian town of Raxaul. The investors claimed that the transaction at bordering Indian market looks more promising. “Unlike the local market, we can get physical delivery there,” said an investor. “We can get delivery by paying tax and commission of the day when the goods were traded.”
The commodities market lacks transparency with no exact record of buyers and investors in the sector. Despite huge losses, no case has yet been registered due to lack of legal provision.
Posted on: 2012-09-10 08:42