KARACHI (APP) - Karachi Stock Exchange will launch Stock Index Futures Contracts (SIFC) on tradable sector indices from January 2012 in oil and gas and banking sectors. According to KSE here Wednesday, oil and gas sector will have four companies namely, OGDC, POL, PSO and PPL while banking sector will have MCB, NBP, UBL, HBL, Bank Al-Falah, ABL and Bank Al-Habib. Sector Index Futures offer opportunities to investors wishing to gain exposure in specific sectors without actually buying each share in that sector. Such investors can use SIFC on sector indices to take positions in an entire sector which can be purchased and sold easily and inexpensively. SIFC contracts on tradable benchmark indices are agreements to buy or sell a standardized value of a tradable sector index thereby allowing investors to track the performance of a basket of securities in a given benchmark index. The mark-to-market losses are collected/paid daily, with cash settlement at the rate of Rs. 5 per index point movement and concluded on maturity (without delivery requirement). Basket order window is also being made available in KATS to facilitate efficient hedging mechanism for small investors, high net worth individuals and financial institutions. The Basket order window will allow investors to place multiple market orders in ready market with same time-priority through a single mouse click for all stocks within a tradable sector index. Once an order set is placed, the basket window will show the execution status for each line item in the basket. With the reduced lot size of 1, it is now more practicable than ever for small investors to gain exposure of leading oil and gas stocks starting from a cumulative value of Rs. 50,000 by paying 12.5% margin (i.e. minimum Rs. 6,5000). Moreover, basket stocks may be bought in the smallest denomination of 1 stock each which can be hedged by selling a similar index futures contract. To facilitate a better understanding of the said product, the management has arranged a series of awareness presentations for all market participants which shall encompass introduction to tradable sector indices, their trading, their working, naming conventions and the risk management regime.