Reforms stir rapid growth in commodity futures market

March 31, 2019: The commodity futures market in Pakistan has witnessed rapid growth since 2007 owing to regular regulatory, structural and operational changes, said Pakistan Mercantile Exchange Limited (PMEX) in its latest report.

Over the years, there have been regulatory structural and operational changes in commodity future market, to improve market practices in various dimensions, it said.

 “The objective of these changes is to bring efficiency, enhance transparency, prevent unfair trade practices and align Pakistan’s commodity futures market with international best practices,” the report added.

It is to be mentioned here that Pakistan Mercantile Exchange Limited (PMEX) is the country’s first and demutualized commodity futures exchange, licensed and regulated by the Securities and Exchange Commission of Pakistan (SECP). 

Based on sophisticated multi-dimensional infrastructure and state-of-the-art technology, PMEX offers a complete suite of services i.e. trading, clearing and settlement, custody as well as back office, all under one roof.

PMEX was formed in 2002 and started its operations in May 2007 offering a diverse range of domestic and international products across multiple asset classes. 

It is a demutualized exchange and the shareholding is completely institution based.

Meanwhile, giving trade details of three months from October to December 2018, the report noted that total contracts traded during the period under review stood at 1,623,558 while the total revenue value of these transactions stood at 1.164 trillion.

The report has also highlighted the top ten brokers based on both trade contracts and trade value.

In terms of traded contracts, Azam Gold Trading (Pvt) limited was at first place, followed by Rays Commodities (pvt) limited and Jahanzaib Commodities (Pvt) limited.

On the other hand, based on traded value, Azam Gold Trading (pvt) limited was in first place followed by Jahanzaib Commodities (pvt) limited and Rays Commodities (pvt limited).

According to the report, the PMEX posted highest-ever monthly trading volume in December 2018 since commencement of its operations in 2007. The exchange registered trading volume of PKR 555 billion for the month of December as compared to PKR82 billion for the corresponding month of last years, posting an increase of 577 percent.

This surpassed the previous trading target volume record of PKR 306 billion achieved in October 2018 by 81 percent.

The PMEX in its recently guidelines for brokers has suggested different methods and ways to efficiently perform in the future market.

(APP)