Karachi: Dr. Shamshad Akhter, Chairperson Pakistan Stock Exchange, visited Pakistan Mercantile Exchange (PMEX). Mr. Ejaz Ali Shah, Managing Director PMEX, welcomed the guest and thanked her for sparing time and showing keen interest in the affairs and mission of the Exchange.
Mr. Shah apprised Dr. Shamshad Akther about the role being played by PMEX in developing a vibrant and robust futures market in Pakistan. While speaking about the progress of the Exchange, Mr. Shah informed that PMEX has gone from strength to strength on the back of technological advancements, diversified product suite, expanded footprint and enhanced customer services. These steps have built trust amongst the market participants and encouraged them to actively trade in futures. As a result, the average daily trading volume has surged to PKR 11.78 billion in 2021 from PKR 3.70 billion in 2015, resulting in a tripling of trading volumes during the last 5 years.
He also briefed about the Direct Fund Model (DFM). Under DFM, the Exchange directly collects funds from customers as well as transfers funds to their bank accounts without the involvement of broker(s). The DFM empowers the customers to get complete control of their funds at all times and restricts the role of the brokers primarily to servicing the existing customers and soliciting new businesses.
Underscoring the challenges faced by PMEX, Mr. Shah highlighted operations of black-market operators in Pakistan. These black-market operators not only eat up PMEX business but also cause heavy drainage of the country’s foreign exchange reserves. Mr. Shah sought the help of Dr. Shamshad in cracking down on these black-market operators.
Mr. Shah also explained that gold is a strategic asset of Pakistan and all efforts should be made to document trading of this important commodity. PMEX being the only futures exchange of the country has experience of physical gold trading and therefore PMEX should be defined as the official platform for the trading of gold. Mr. Shah also explained that opening the import of gold and allowing free export of gold will increase the Foreign Exchange Reserves of Pakistan provided that “own resources” is defined correctly in the import policy. The documentation of gold will also increase the tax revenue of the Government of Pakistan.
Mr. Shah explained in detail about Global Commodity Trading Platform (GCTP), a wholly-owned subsidiary of PMEX. GCTP will offer an e-commerce platform that will allow Pakistani commodity producers and exporters to sell agri and non-agri commodities to global buyers with a click of a few buttons. At present, GCTP is ready to be launched and the only remaining matter is the approval of State Bank of Pakistan (SBP) with respect to the timing of conversion of foreign currency, which is expected soon.
Dr. Shamshad Akhter thanked Mr. Shah for the detailed briefing on PMEX and its upcoming initiatives. She appreciated the efforts of the Exchange in streamlining investors’ funds through DFM which will help in building investors’ confidence in trading futures at PMEX. She acknowledged the need of cracking down operations of the black-market operators and assured her fullest support in eradicating this menace. Furthermore, she appreciated GCTP, which will act as a catalyst in boosting the exports of Pakistan. She also assured the best support to PMEX in its future endeavors.