KARACHI — SEPC spokesman Imran Ghaznavi said on July 22 that the Commission will allow 18 companies to resume trading of deliverable futures contracts on the Karachi Stock Exchange (KSE) Aug. 1. “The commission also directed the KSE to carry out a comprehensive review of futures trading for three months starting in August, and submit its report to the commission thereafter,” Ghaznavi said. Depending on its findings, the report may lead to expanding the list of companies allowed to trade futures.
The KSE Board of Directors approved a road map for the development of the market, he added. The plan includes the re-launch of the deliverable futures contract market, renewing the availability of margin financing and the introduction of index-based market and trading halts using widening circuit breakers.
“The resumption of futures trading will improve the sentiment of the market and encourage small investors to buy,” Naeem Securities CEO Muhammad Naeem said.
The deliverable future contracts market was discontinued a few months ago during the KSE’s response to the global economic crisis. The companies that will resume futures trading next month are Pakistan Oil and Development; MCB Bank Limited; Fauji Fertiliser; DG Khan Cement; Pakistan Telecommunications; Bank Alfalah; Pakistan Petroleum Limited; Pakistan State Oil; Lucky Cement; Nishat Mills; Adamjee Insurance; United Bank Limited; National Bank of Pakistan; Engro Chemical Pakistan; Hubco Power and Azgard Nine.
Those companies are currently the top performers in the KSE. A KSE official said its board initially recommended only 10 companies for futures trading, but the SECP selected eighteen.
The commission also established more exhaustive eligibility criteria other companies must meet before they will be allowed into the futures market. They are safeguards that will enhance transparency and prevent speculators from manipulating the prices of securities.
http://centralasiaonline.com/en_GB/articles/caii/features/2009/07/24/feature-06
