KARACHI - Karachi Stock Exchange has introduced the first Market Maker under a two-year contract for futures shares trading.

AKD Securities Ltd signed an agreement to become Market Maker in KSE-30 based Stock Index Futures at Karachi Stock Exchange. AKD Securities has committed to execute a minimum of 100 contracts daily and up to 500 contracts within 6 months.

A press conference was jointly addressed by KSE Managing Director and the CEO of AKD Securities to explain the modalities, terms and conditions of the Market Making Agreement.

Speaking on the occasion, Nadeem Naqvi, the Managing Director of Karachi Stock Exchange, said that Stock Index Futures Contracts were launched as the central element of Derivatives Segment some time back. Lack of liquidity has been the biggest challenge and hurdle in development of the Derivatives Segment, which includes Cash Settled Single Stock Futures and Stock Index Futures.

AKD Securities will provide and execute the above mentioned contracts with quantum in value traded expected to grow from Rs 6.5m/day upon commencement to Rs 32.5m/day in six months’ time.

Nadeem Naqvi lauded the extremely supportive role of the SECP and thanked the Commission for granting approval for wavier of basic deposits in Stock Index Futures and Cash Settled Single Stock Futures, approving regulations governing Exchange Traded Funds(ETFs), rightsizing of margining regime for (Margin Trading, Stock Lending and Borrowing) and approving pro market amendments in regulation governing Market Making at Karachi Stock Exchange, in the best interests of capital market development in Pakistan.

He further said that Lahore Stock Exchange’s request to allow KSE-30 Index based Futures trading at Lahore Stock Exchange has been approved by the KSE Board. KSE and Bombay Stock Exchange (BSE) are also in advanced stages of discussion regarding cross listing of indices on Futures Contracts.

The recent circular from the Reserve Bank of India (RBI) allowing Pakistani individual and corporates in Indian company shares is a welcome development and should help in accelerating the cross listing process between KSE and BSE.

CEO AKD Securities, Farid Alam thanked KSE for providing them an opportunity to play their role in the development of capital market industry.

He acknowledged that they would provide liquidity by committing to remain on both sides of the Stock Index Future Order book daily. He was confident that his company and group have the will and ability to meet this momentous task in the wider interest of developing Pakistan’s capital market.