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Wednesday, 18 July, 2012
PMEX is thE trailblazEr Warehouse company in the offing to facilitate delivery of traded commodities KARACHI
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IsMaIL DILaWar
AKISTAn Mercantile Exchange (PMEX) is collaborating with the central bank and financial institutions on the establishment of a body to facilitate the delivery of commodities traded at the commodity exchange. According to PMEX officials, the proposed warehousing system was successfully working in India, Brazil, South Africa and other agricultural countries. The Warehouse Management Company (WMC) is expected to come into being within next three to six months, said the officials. “This is a slightly medium-term thing to facilitate deliveries of our traded commodities,” said PMEX managing director Samir Ahmed, Presently, the delivery of traded commodities are made at various designated places like rice at Karachi Port and Port Qasim, sugar at sugar mills and wheat at warehouses based in Okara, Faisalabad and others districts of Punjab province. “The Exchange designates the delivery points,” Samir told Pakistan Today. The PMEX chief said the Exchange was focusing more on agriculture sector which had appeared to be a more organized sector, especially on the storage and
warehousing front. The WMC MD said, ‘PMEX was a low-investment venture as the company is envisaged to manage and not own the countrywide warehouses. Samir said the grading, receipts and other techniques would be employed for the trading and financing of the traded commodities. Wheat, rice and sugar are the commodities which are currently traded at the country’s first and only de-mutualised commodity exchange. Gold and silver are the metals being traded
The idea to set up the company was floated by the State Bank last year but then delayed as the central bank wanted the banks to be the major shareholders in the company. Without naming the banks, the PMEX MD said some large banks were working on the project. The sources, however, said the banks involved were the national Bank of Pakistan, MCB Bank and other big banks. The commodity exchange seems to have done well by taking the daily average turnover from Rs 5 to Rs 6 billion during its 21-hour daily operations that
En route to revival
Cross-LoC trade on road to revival as 4th meet slated for the18th POONCH NNI
The Fourth Traders meet of this year and first after suspension of trade due to volatile situation between armies of both sides at Krishna Ghati sector is scheduled to be organised on July 18 next at Chakkan-Da-Bagh. Traders from both sides of divided Jammu and Kashmir will meet at around 11.30 AM on July 18. Both sides are demanding presence of defaulter traders during the meet on priority so that their accounts are cleared. Traders have decided to further strengthen Cross LoC Joint Traders Federation and will discuss various issues of traders participating in Cross LoC trade. “We have constituted joint traders federation this month and in this traders meet we will discuss various issues,” said Cross LoC Traders Association President Pawan Anand adding that role of this federation is to look in to various issues of traders including registration of traders, Cross LoC trade, enhancement in items and various other issues. He said that it is possible that members of Joint LoC Federation from this route may further organise a separate meeting on July 18 at Chakan-Da-Bagh to discuss various issues of federation. “I have already requested Pakistani authorities to bring defaulter traders in the traders meet and as per sources at Trade Facilitation Centre authorities of both sides have exchanged list of defaulters,” he stated. Pertinently, in last traders meet, traders from Azad Kashmir protested by showing black flags to officers from both sides as Indian authorities did not bring defaulter traders with them while Indian authorities forcefully brought a Jammu
PMEX initiates trading in 10 ounce silver contract ISLAMABAD: Pakistan Mercantile Exchange Limited launched the 10 ounce silver contract this week for its small investors. Pakistan Mercantile Exchange , Chief Business Officer, Mansoor Ali said that trading started in the contract right after approval was received last week from Securities and Exchange Commission of Pakistan. PMEX has currently opened two contracts for the months of August and September. “PMEX 10 Oz Silver contracts are cash settled future contracts. Trading Unit for the contract is 10 Troy Ounces and the price quotation is in US dollars per troy ounce while the P/L and Margins are in Rupees. Primary advantage of the contract is to provide market participants with more options to invest and hedge over a transparent platform”, he said. “The listing of the 10 oz silver contract has added further depth to the market for investors who actively invest and trade in the commodity”, he added. He further mentioned, “up until now Silver Futures were being offered in two lot sizes of 500 ounce and 100 ounce respectively. With the addition of 10 ounce lot size, PMEX has introduced an option for the smaller investors to enter the Silver market and broaden their investment portfolio”. Although silver is comparatively lower priced metal in comparison to Gold, investors look for a lower size trading unit to be able to build an understanding of the particular commodity before opting for the larger contract sizes.. Introducing a smaller contract will allow people to still benefit from attractive trading opportunities in silver without compromising the risk management principles of the exchange or excessive position taking by investors. NNI would be extended to 23 hours in next couple of months. Samir, however, is far from satisfied and said “We were nowhere in terms of size of the market.” “Despite trading three commodities (Irri 6 rice, sugar and wheat) the trading volume are not very big,” he added. The PMEX MD said it was the most challenging task for his side to get the local commodity market activated.
“You, actually, have to develop the market,” for which, he said, the PMEX was engaging the farmers, the government, the food companies and the whole value chain. In Fiscal Year 2013, Samir said, cotton and maize will be the two agriculture products to be enlisted for trading at the exchange this would certainly increase the volume on the new market.
SECP opens Takaful insurance for all ISLAMABAD staff rEpOrt
based trader in the traders meet at Chakan-Da-Bagh. Custodian Cross LoC trade, Abdul Hamid, when contacted said, “We have exchanged the list of traders willing to participate in cross LoC trade. Azad traders demanded 32 Indian defaulter traders while Indian traders demanded 25 AJK defaulter traders to be present in July 18 meet. We will bring all defaulter traders in the trader meet and it depends on AJK administration whether they will bring all defaulter traders.” LoC Trader Association General Secretary Krishan Singh said that in the last traders meet, all defaulter Indian traders, excluding the two were present. “Azad Kashmir authorities did not bring defaulter traders in the last traders meet now we have given a notice to AJK authorities through Custodian Trade for bringing all defaulter traders with them in this traders meet,” he maintained.
To give boost to the domestic insurance sector, the Securities and Exchange Commission of Pakistan (SECP) has allowed all the incumbent players in the conventional insurance sector to offer Islamic insurance or Takaful under the new Takaful Insurance Rules 2012. Addressing a news conference SECP Chairman Muhammad Ali said the opening of Takaful window will provide an opportunity to the big players of the traditional market to tap the huge potential through their countrywide operations. At present the insurance penetration in the country remains 0.7 percent which is lowest in the South Asian region which on the average has 4 to 5 percent penetration. “Allowing Takaful to all companies would help enhance the penetration to 1.2 percent within the next three years, he said adding that meant 70 percent growth in the companies businesses”. Takaful was introduced six years back and initially only five Islamic insurance companies were allowed to provide the service. The protection was given to
Pouring oil over $1.9b annually ISLAMABAD: Despite large scope for edible oilseeds production, the aiddependent Pakistan is bearing a dint of $1.9 billion annually due to import of edible oil, sources reported. According to sources, Pakistan is importing more than 2 million tonnes edible oil annually for which the country is paying over US $ 1.9 billion against 2.2 million tonnes of local production as edible oil seeds production area has been neglected for many years. “Long run agriculture growth can be boosted up by investment in such avenues which will also help to save foreign exchange by reducing edible oil imports,” said the source. According to an official, the country presently produces only about one fourth of domestic demand. There is a large scope for edible oilseeds production. In Sindh sunflower cultivation has been successful and the support price of Rs 2,220 per mound is also an incentive for small farmers to diversify their cropping patterns. In Punjab and Khyber Pakhtunkhwa, special initiatives for cultivation of olive are being taken. Particularly, Punjab Agriculture and Meat Company’s (PAMCO) project of declaring Potohar region as olive valley can be a significant development. In this regard, PAMCO has taken initiative to develop certified nurseries through private sector starting from Potohar including Attock, Rawalpindi, Chakwal, Jehlum and Khushab districts. ONLINE
them as they started with less capital but now it was hindering further development of the market. “There is huge demand for Takaful insurance in the country as people don’t prefer conventional insurance”, he added. SECP Chairman said for the growth of capital markets and to involve masses in shares trading, there is a dire need to introduce a concept of certified market player in Pakistan as people without any criteria can be handling life savings of general public in the stock markets. “One certification programme is already being conducted by the Institute of Capital Markets and it would be expanded soon,” he added. Currently, the certification programme by the Institute of Capital Markets (ICM) is optional for the brokers, dealers’ punters etc but the SECP has plans to make it mandatory for all the market players to get the certification if they were to handle the investor’s money in the stock markets. “We plan to make this requirement mandatory
soon. It will be done eventually and the Commission is in process of formulating regulations in this regard,” Chairman SECP said. The officials said that market players need to know certain wrong practices very often committed around the world are not in line with market ethics like insider trading, front running, market control and market manipulation. “These certification programmes would also impart the knowledge among brokers and dealers that they would be eventually caught and penalised heavily by the regulator,” SECP Chairman said. The officials said that the exchangers and the brokers also needed to develop various products to attract the investors in stock markets as currently only equity trade is being executed in the capital markets. “We need derivatives, commodity futures, currency futures etc even the mutual fund market is at a limited stage here,” Securities Markets Division Commissioner Imtiaz Haider said.
Gloomy? Yeah, it’d get worse Already sluggish global recovery shows signs of further weakness: IMF ISLAMABAD: An already sluggish global recovery shows signs of further weakness, mainly because of continuing financial problems in Europe and slower-than-expected growth in emerging economies, the International Monetary Fund( IMF) said. The Global Financial Stability Report (GFSR) said that risks to financial stability increased in the second quarter of 2012 because of the continued slow global recovery and fears about the quality of bank assets in Europe. An update to the IMF’s Fiscal Monitor said that fiscal adjustment in both advanced and emerging economies is proceeding as expected. The latest World Economic Outlook projects that the global economy will grow 3.5 percent this year, down 0.1 percentage points from the April forecast, and 3.9 percent in 2013, 0.2 percentage points lower (see table). “More worrisome than these revisions to the baseline forecast is the increase in downside risks,” said Olivier Blanchard, the IMF chief economist and director of the IMF’s Research Department, which prepares the WEO. ONLINE