Essay on “Information asymmetry, market efficiency and likelihood of arbitrage” in bullion and energy sectors commodity market in India

FINANCE

The evolution and growth of bullion and energy precinct commodities market in India has shown an impressive record of performance in the past decade. Hedging under these categories is becoming a thriving phenomenon itself compared to the other sector commodities traded in India because of its volatility spillovers. Exploration of the fact underlying such a structural breakdown can bring sometime a presence of information asymmetry in the markets under study and that may cause a severe arbitrage. The purpose of this paper is to identify the efficiency of bullion and energy sector commodity markets by assessing the relationships between futures prices and spot market prices. Consisting with the hypothesis that Indian commodity future market of bullion and energy sectors is efficient and symmetry of information is being maintained among all the stake holders who are having the active participation in both the markets. The entire work has been categorized into two sections comprising chapter one, detailing bullion market and chapter two elucidates energy sector commodity derivatives. The sample has been encompassed 7 bullions and 3 energy sector commodities from 2016 to 2019

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