Pakistan Mercantile Exchange (PMEX), Karachi Stock and Institute of Capital Markets jointly conducted a seminar on the commencement of Agri Commodities physical deliverable trading at the Karachi Stock Exchange (KSE) on November 5. KSE Managing Director Nadeem Naqvi, ICM CEO Javed Hassan, Maroof Moulvi of M M Group of Companies, PMEX Director Majeed Adam and other agriculture related personnel were present on the occasion.
Nadeem Naqvi opened the seminar by welcoming the guests and explained in detail the importance of commodities in developed economies. He welcomed the steps taken by PMEX on introducing Agri commodities in their portfolio and encouraged the local players to use these hedging products being offered by the capital markets of Pakistan.
While speaking on the occasion, Javed Hasan, the ICM CEO said that PMEX was the only organisation in Pakistan which provided a centralised and regulated system for future trading and was regulated by the Securities and Exchange Commission, Government of Pakistan. He welcomed the launch of new contracts at PMEX and maintained that PMEX had a long way to go in the Development of Commodities trading in Pakistan.
Maroof Moulvi of M M Group mentioned that his company had been extensively engaged in the process of Market Development and believed that their role as a market maker and liquidity provider will be remembered for long period of time.
Faisal Malik, Business Head of agricultural products explained investment opportunities and benefits of agricultural commodities futures trading at the PMEX to brokers and general investors.
He stated that futures contract at PMEX was an agreement between two parties to buy or sell a commodity at a certain time in the future against an agreed price.
He further said that futures contracts could be useful when marketing gains because they could be a temporary substitute for an intended transaction in the cash market that would occur at a later date. In the absence of a proper risk-management tool, banks are reluctant to fund farmers. If they do, the interest rates are very high. The trading of rice (IRRI-6) and wheat has already started on PMEX. He also stated that PMEX was in the process of launching a collateral management company for storage, certification, and issuing warehouse receipts.
Sani-e-Mehmood Khan, KSE General Manager added that the availability of futures markets and hedging facilities reduced the risk perception, and with banks willing to provide easy loan to farmers made the Exchange based futures commodities trading, an easy bit.-PR