Lahore Stock Exchange to Introduce Stock Index Futures Contracts Soon

Lahore, July 19, 2012 (PPI-OT): Lahore Stock Exchange (G) Limited shall introduce future product with underlying assets based on KSE-30 Index in Stock index Futures Contracts (SIFC) Market.

Mr. Sani-e-Mehmood Khan, GM, Marketing and Product Development from Karachi Stock Exchange (G) Limited gave a detailed presentation to the members of Trading Affairs Committee on Modus Operandi of trading of underlying KSE-30 Index in SIFC Market segment at LSE. A meeting of Regulatory, Operations and Technology Services Division was also held with him where he explained legal, operational and regulatory aspects of KSE-30 Index trading at LSE trading software.

He said that KSE-30 Index would be started in two sectors; the Oil and Gas and the Banking. He explained modalities of the new product that would be traded at LSE. Speaking on KSE-30 Index, he said that Sector Index Futures offers the opportunities to the investors to gain in specific sectors without buying scrip that constitute the sector.

Elaborating detail of trading of KSE-30 Index in SIFC Market, he said that Mark-to-Market Losses shall be collected on T+0 basis by the Exchange and Profit shall be distributed on T+1 basis through NCCPL with cash settlement at Rs. 5 per index point movement.

The settlement shall be concluded on maturity without any requirement of delivery. In SIFC market, client level margining at 12.5% shall be required by Brokers to deposit in cash and/or bank guarantee. Circuit breaker shall also be applicable in SIFC in case of movement of 7.5% above or below of the previous day closing price.

Mr. Aftab Ahmed Ch., CEO/Managing Director of Lahore Stock Exchange (G) Limited stated that SIFC Contracts on tradable benchmark indices are agreement between two parties to buy or sell a standardized value of tradable sector index. He said that investors can use SIFC on sector indices to take short or long positions in an entire sector which is cost effective.

This product may be used as a hedging tool by those investors who have investment portfolio of blue chips which constitute KSE-30 Index. Responding to a question he said that Basket Order Window is being made available in SIFC market segment at ULTRA to facilitate efficient hedging mechanism for small investors, high net worth individuals and financial institutions. He further stated that LSE aimed to breathe new life into its stock market with the introduction of new future contract and other major financial derivative products.

For more information, contact:
Lahore Stock Exchange (LSE)
19, Khayaban-e-Aiwan-e-Iqbal,
P.O. Box: 1315,
Lahore-54000, Pakistan
Tel: +9242 636 8000
FAX: +9242 636 484 -85
E-mail Address: info@LahoreStock.com
Web Site: http://www.lse.com.pk