2. Pakistan Mercantile Exchange
PMEX
Introduction
Pakistan Mercantile Exchange Limited (formerly National Commodity Exchange
Limited - NCEL) is Pakistan first futures commodity market having its
registered Head office in Karachi, Sindh.
It is the only company in Pakistan to provide a centralized and regulated place for
commodity futures trading and is regulated by Securities Exchange Commission
of Pakistan (SECP). It has started full trading activities on 11 May 2007.
Pakistan Mercantile Exchange (formerly National Commodity Exchange
Limited) is the first technology driven, web-based, demutualized multi-
commodity exchange in Pakistan.
3. Introduction
It is licensed and regulated by the Securities and Exchange Commission of
Pakistan and has a 100% Institutional shareholding.
Pakistan Mercantile Exchange Limited started its operations in May 2007
as a fully electronic exchange with nationwide reach.
The Membership of Pakistan Mercantile Exchange is open to all.
Currently there are more than 300 members registered on the Exchange
and the number is growing every month. The members include brokerage
houses, individuals and industry specialists ranging from traders to
exporters and importers and commodity specialists.
The Exchange recently increased its timings and now operates 21 hours.
4. Introduction
Pakistan Mercantile Exchange recently changed its name from
National Commodity Exchange Limited to better reflect its
broad mandate and scope of activity to trade all types of
futures contracts.
National Bank of Pakistan, Karachi Stock Exchange, Lahore
Stock Exchange, Islamabad Stock Exchange, Pak Kuwait
Investment Company (Pvt.) Limited, and Zarai Taraqiati Bank
Ltd.
5. Commodities Traded
Pakistan Mercantile Exchange (formerly National Commodity Exchange
Limited - NCEL) initially started trading in Gold only. This listing was
followed by the first gold physical delivery in August 2007. Additional
Products were subsequently launched – IRRI -6 rice in March 2008 Palm Olien
futures in June 2008 and KIBOR futures in Jan 2009. Crude Oil and Silver
contracts were listed in Nov 2009. Recently the Sugar contract was also added
in June 27, 2011.
The main commodities traded on the Exchange have been Gold, Silver and
Crude Oil. There are various contracts in each. Gold has eight contracts namely
Gold 1 ounce, Gold 100 ounce, Gold 1 Tola, Gold 50 Tola, Gold 100 tola, Gold
Kilo, Gold 100 g, and Minigold 10 g. Tola gold and minigold are deliverable
contracts. Furthermore, there are two contracts in Silver – 100 ounce and 500
ounce and two contracts in Crude Oil – 10 barrels and 100 barrels. The smaller
lot sizes for Silver and Crude Oil were introduced very recently in June 2011.
6. Vision and Mission
Vision
To be the leading institution in Pakistan for developing and managing commodity and financial
futures markets; and to contribute to the economic growth of Pakistan by providing a transparent,
safe and efficient marketplace for saving, investment, hedging and trading needs of all
participants.
Mission
To achieve our Vision by employing efficient risk management practices, technological advances
and product innovations; coupled with education of participants, using our intellectual capital to
the fullest and adherence to our core values. To perform our regulatory role without
compromising the principles of transparency, fairness and independence. To work closely with
stakeholders in order to build market infrastructures that the benefit everyone. To ensure highest
levels of integrity and ethical business practices without conflicts of interest, internally as well as
for participants.
7. Creating a Winning Culture
PMEX is determined to create a culture where values such as Candor, Merit,
Respect, Integrity, Transparency and Imagination are adhered to. Each of these
values are not only linked, they strengthen each other; a principle which is at
the heart of PMEX. And that’s how we define winning!
Core Value
Candor
Merit
Respect
Integrity
Transparency
Imagination
8. Products of PMEX
These products that are generally offered at the exchange can be broadly
classified into the following two categories.
Global Products
These products are in most part available amongst all futures exchanges and
therefore categorized and global commodities. Examples of such products
are Gold, Silver, Crude Oil, Currency Pairs, Natural Gas, and Cotton.
Local Products
These are the products that are produced and traded locally. Thus the product
suite differs from country, Example of such products are Wheat, Sugar,
Corn, Rice, Red Chili, and Palm Olein.
9. Products of PMEX
The products offered by PMEX can be clubbed into four main asset
classes: metals, agriculture, energy and financial futures. Within each
commodity, a verity of contracts is offered based on currency
denomination, contract size and tenure. The beneficiaries of these
contracts are;
Hedgers: Who trade in commodity futures to mitigate the price volatility
risk
Investors: Who invest for long term
Speculators: Who trade with the aim of earning profit based on their
market strategy
10. Technology
PMEX has developed a state-of-the-art technology driven trading platform that
allows seamless and secure trading. It facilities the market participants to connect
with the Exchange from across the globe and trade virtually round-the-clock.
The Exchange offers an efficient trading environment to the market participants
irrespective of their location and time zone. The exchange has integrated its trading
platform with internationally recognized trading system thereby offering
dependability and enhanced performance to market participants.
PMEX also offers a robust back office management system to its members
comprising of three independent platforms, namely: Clearing, Settlement, and
Reporting (CSR). Trader Account Management System (TAMS) and e-Books.
11. Business Continuity and Disaster Recovery (BC and DR)
The Exchange has fully equipped itself to respond to all types of
eventualities such as natural calamities, civil unrest and security breaches.
PMEX has a fully operational BC and DR site, which provides a robust
structure for resuming all the critical operations in the shortest possible time.
Technology Partners
1. MetaQuotes Software Corp (MT5)
. Client Desktop Application
. Mobile Application
2. Catalyst
. Download Application
. Web login
12. How to Trade at PMEX
Any person or a body corporate who wants to trade on the Exchange platform needs to
approach a member broker of PMEX to open a trading account. Once the account is opened
and funds (margins) are made available, clients can trade at their own convenience via the
exchange web based trading platform.
Membership
PMEX offers two types of membership.
1 .Universal Membership
Universal membership is entitled to trade in all futures contracts across all asset classes listed
on the exchange.
2 .Commodity Specific membership
Commodity specific members are allowed to trade in all futures contracts in a particular
commodity.
13. Benefits of trading at PMEX
Market Transparency
Ensured through electronic matching of bids and offers based on price time priority, using advanced
technology and system especially created for today’s commodity markets.
Global Price
Price of international commodities traded at the exchange are referenced to global exchange.
Price Discovery
For local commodities traded in large quantities.
Counterparty Guarantee
Clearing and settlement is guaranteed through an in-House regulated clearing house.
Risk Management
Robust risk management framework based on international best practices.
Time Zone Convenience
The 21 hours seamless trading environment thereby providing trading opportunities virtually round
the clock.
14. Investor Awareness Programs
Keeping in view the need of awareness about futures trading in Pakistan, PMEX has
taken an initiative to organize awareness programs through workshops, trainings and
seminars, which aim to equip existing and potential market participants and investors
with the knowledge of the futures market. Currently, Exchange is organizing the
following programs.
Futures Trading 101
The Exchange commenced Futures Trading 101, biweekly free of cost training sessions
every Tuesday and Thursday from 3:00 PM to 5:00 PM, in Dec 2013. These training
sessions are aimed for diverse set of audience such as students, housewives, retirees,
salaried and business professionals etc. The training not only provides an in-depth
knowledge of commodity fundamentals, technical analysis and listed products at PMEX
but also equips trainees with hands on experience with the Trading System at PMEX.
15. Investor Awareness Programs
Educational Institutions
Students of business schools are ‘managers in making’ and require
extensive interaction with diverse real world business environment. In
line with this, PMEX actively participates in comprehensive and
interactive workshops & seminars at various educational institutes and
educate the next generation business leaders about the benefits of futures
trading at a regulated exchange.
PMEX Joins Hands with International Associations
PMEX is a member of association of future market (AFM) and future
industry association (FIA).
