NSE saw trading of only Rs. 35 crore compared to Rs. 691 crore last year on Akshaya Tritiya.
After four years of consistent growth, trading volumes of gold ETF declined drastically both on NSE and BSE on Akshaya Tritiya. The demand for gold generally shoots up during Akshaya Tritiya which is considered to be an auspicious day for buying the yellow metal.
NSE recorded trading volume to the tune of Rs. 35 crore as against Rs. 691 crore on Askshya Tritiya last year. BSE saw trading worth Rs. 18 crore compared to Rs 615 crore last year. More than 66,000 units were traded in gold ETF of BSE on Akshaya Tritiya.
Both NSE and BSE had extended market timings on Akshaya Tritiya for trading in Gold ETFs till 7pm.
V Balasubramanian, Fund Manager, IDBI Mutual Fund attributed this decline to non-availability and unattractive prices of gold. “The 80:20 scheme and hike in import duty to 10% have discouraged investors to put money in gold,” he said. Under the 80:20 scheme, nominated agencies can import gold on condition that 20% of the shipment would be exported and the remainder kept for domestic use.”
Anubhav Srivastava, Sr. Vice President and Head of Product Development, Motilal Oswal Mutual Fund said “The appetite for gold usually increases during uncertain market condition and in the recent past the country has shown some sign of recovery. Also, due to inadequate supply of gold, the trading of gold ETF has declined.” He expects recovery in gold market once government lifts curbs on gold. Last year, government had increased customs duty on gold to 10% from 4% to discourage imports.”
Another senior official from a mid-sized fund house said that supply of physical gold has moved from official channel to unauthorized channel (smuggling etc.) which has disturbed distribution of gold.
Gold funds have delivered returns of 4.76 % in the last one year. Today, 14 fund houses collectively provide 25 gold ETFs and gold funds which together hold assets worth Rs. 13,041 crore as on March 2014.
The largest pie in the gold ETF market is held by Goldman Sachs which manages Rs. 2,358 crore followed by Reliance (Rs. 2,230 crore), SBI (Rs. 1,241 crore), Kotak (Rs. 785 crore), HDFC (Rs. 744 crore), UTI (Rs 606 crore). Many AMCs have launched gold fund of funds, which invest in gold ETFs for those investors who do not possess demat accounts.
