Jim Rogers & India's Commodities Ban
Banning commodities investment & futures trading is senseless, says Jim Rogers...
GLOBAL COMMODITIES guru Jim Rogers says the Indian government's decision to ban futures trading in some commodities is "senseless" and "politically motivated" writes George Iype at Commodity Online.
In an exclusive interview, Rogers – the global investor best-known for co-founding the successful Quatum Fund with George Soros – blamed India's politicians and bureaucrats for curbing commodity futures trading by measures such as the recent bans.
India has banned futures trading in commodities like wheat, rice, soy oil, rubber, potato and chana, arguing that futures market is leading to price rise in these commodities.
"Someone needs to educate India's politicians and bureaucrats that futures trading is not causing price rise in essential commodities and inflation," Rogers said.
On the one hand, while India is talking of going forward in economic reforms, drastic decisions such as banning commodity futures proves that the country needs to catch up a lot in opening up the economy, he went on.
Rogers, author of the best-selling Hot Commodities and A Bull in China, said India needs to study the financial lessons of its near neighbor, China.
"Price rises and inflation are issues of global debates these days. Every country is affected by these. But countries like China has the right price mechanism strategies while India goes ahead and bans futures trading commodities," he said.
Jim Rogers also explained how he is always fascinated by India and the opportunities the county has for global investors especially in sectors like information technology. "Yes, certainly, India is a great destination for global investments. But now the Indian stock market is all over-heated. And if you ask me, I will not invest in Indian stock markets because it is over-priced. And that is why it is coming down these days."
Rogers asked the Indian government to come out with laws to attract investments in the domestic commodities sector.
"India and China are the movers of commodities business in Asia. But India needs to open up the commodities market. I find it difficult to believe why India has not allowed foreign investors, mutual funds and banks from investing in commodities funds," he added.