ISLAMABAD – JULY 22, 2009: Securities and Exchange Commission of Pakistan (SECP) has approved an exhaustive eligibility criterion as a result of which 18 securities qualify for trading in deliverable futures contract market (DFCM).
SECP while granting approval, the Karachi Stock Exchange has been advised to carry out a comprehensive review of the DFCM and submit a report to the SECP after three months from the launch of August 2009 contract. The scope of the review extends to the entire risk management system and eligibility criteria etc.
The Board of Directors of Karachi Stock Exchange (G) Limited in its meeting held on July 14, 2009 approved a road map for the development of the market. This roadmap inter-alia includes the re-launch of deliverable futures contract Market (DFCM), availability of margining financing and introduction of index based market halts/trading halts by widening circuit breakers.
The DFCM which was earlier discontinued effective May 2009 contract will be re-launched with effect from August 2009 futures contract Accordingly, based on the request of the Exchange, the Securities and Exchange Commission of Pakistan (SECP) has approved criteria for selection of securities eligible for trading under DFCM. In terms of the said criteria and data provided by the Exchange, the securities that qualify for trading in DFCM are as follows:
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Sr. No.
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Name of Security
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Sr. No.
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Name of Security
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1
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Oil and Gas Development Company Ltd.
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11
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D.G. Khan Cement Company Ltd.
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2
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MCB Bank Limited
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12
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Pakistan Telecommunication Company Ltd.
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3
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Fauji Fertilizer Company Ltd.
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13
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Bank Al Falah Ltd.
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4
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Pakistan Petroleum Ltd.
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14
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Fauji Fertilizer Bin Qasim Ltd.
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5
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Hub Power Company Ltd.
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15
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Lucky Cement Ltd.
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6
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Pakistan State Oil
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16
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Nishat Mills Ltd.
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7
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Pakistan Oilfields Ltd.
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17
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Adamjee Insurance Company Ltd.
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8
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National Bank of Pakistan
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18
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Azgard Nine
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9
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United Bank Ltd
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10
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Engro Chemical Pakistan ltd.
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The Board of Exchange in its proposal to the SECP had recommended short listing of only top 10 securities qualifying the said eligibility criteria by ranking them and assigning equal weightage 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 few particular securities the SECP has approved more exhaustive eligibility criteria as a result of which the above mentioned 18 securities qualify for trading in DFCM. While granting approval, the Exchange has been advised to carry out a comprehensive review of the DFCM and submit a report to the SECP after three months from the launch of August 2009 contract. The scope of the review extends to the entire risk management system and eligibility criteria etc.
The re-launch of DFCM is expected to help boost trading activities and the related volume of business in the stock market.
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