AAJ TV : Pakistan Ki Awaz

KARACHI : The board of directors of Karachi Stock Exchange (KSE) in its meeting scheduled for Tuesday, July 14 is likely to approve re-launching of deliverable futures in 10 scrips, sources said. The issue of the five suspended KSE members is also on the agenda and the board is also likely to take any decision in this regard.

Sources told Business Recorder on Monday that the board members were of the view that there is an immediate need for any leverage product at the share market to help boost trading activities. The trading volumes have significantly declined after discontinuation of CFS Mk-II and deliverable futures from April 8, 2009.

The KSE committee had already approved the idea to re-launch the deliverable futures at the share market to increase trading activity at the exchange. Now the committee will present its proposal before the KSE board for approval. Sources said that after the approval of KSE board, the proposal would be sent to the apex regulator - Securities and Exchange Commission of Pakistan (SECP) for its approval.

"It is expected that the deliverable futures product could be re-launched by the end of this month," sources said. However, it is subject to the approval of SECP, they added. Earlier, the SECP had announced to discontinue CFS Mk-II and deliverable futures products in the best interests of the capital market in Pakistan from April 8, 2009. The SECP had said that the decision was taken in light of recommendations of CFS Mk-II Review Committee, constituted by the SECP.

The SECP had also announced to phase out the unreleased amount of CFS Mk-II in 3 working cycles of 22 business days. The unreleased CFS Mk-II amount was around Rs 9.6 billion on April 8, 2009 that has almost been released till July 13, 2009. The SECP had announced that no new contract will be opened in the Deliverable Futures Market from April 20, 2009.

According to the SECP announcement: "The Commission shall co-ordinate with the stock exchanges to develop effective futures products in line with international best practices. The Commission shall also strive to implement alternative financing products to cater for the financing and leveraging needs of market participants." Meanwhile, the KSE board will also take a decision regarding the five suspended members.

Copyright Business Recorder, 2009