Thursday, July 23, 2009
By our correspondent
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Wednesday approved 18 securities for trading in deliverable futures contract market (DFCM), says a statement issued here.
The commission, while granting approval, advised the Karachi Stock Exchange (KSE) to carry out a comprehensive review of DFCM and submit a report to the SECP three months after the launch of the August 2009 contract. The scope of the review extends to the entire risk management system, eligibility criteria, etc.
Board of directors of the Karachi Stock Exchange (Guarantee) Limited, in its meeting held on July 14, approved a roadmap for the development of the market. This roadmap includes the re-launch of deliverable futures contract market (DFCM), availability of margin financing and introduction of index-based market halts/trading halts by widening circuit breakers.
DFCM, which was earlier discontinued from the May 2009 contract, will be re-launched with effect from August 2009 futures contract and the SECP has approved criteria for selection of securities eligible for trading under the DFCM.
In terms of the criteria and data provided by KSE, securities that qualify for trading in the DFCM are as follows:
Oil and Gas Development Company, MCB Bank, Fauji Fertilizer Company, Pakistan Petroleum, Hub Power Company, Pakistan State Oil, Pakistan Oilfields, National Bank, United Bank, Engro Chemical, DG Khan Cement Company, Pakistan Telecommunication Company, Bank Alfalah, Fauji Fertilizer Bin Qasim, Lucky Cement, Nishat Mills, Adamjee Insurance and Azgard Nine.
The KSE board, in its proposal to the SECP, had recommended short-listing only top 10 securities by ranking them and assigning equal weight to their free float market capitalization and daily average impact cost during the review period. However, in order to enhance transparency and avoid chances of manipulation in a few particular securities, SECP has approved more exhaustive eligibility criteria as a result of which 18 securities have qualified for trading in the DFCM.
The re-launch of DFCM is expected to help boost trading activities and related volume of business in the stock market.
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