In order to help farmers through best price discovery and enable banks to provide post-harvest financing to them, the Lahore Stock Exchange (LSE) will soon establish the first of its kind spot commodity trading platform through a subsidiary.
LSE Managing Director and CEO Aftab Ahmad Chaudhry, while making the disclosure during discussions with Andrew Gastaldello, President of Utiba Mobile Financial Services Group of Singapore, said the spot commodity market was quite opaque where farmers acted as price takers as the price discovery process was monopolised by middlemen. He said these middlemen also acted as informal money lenders who were nothing but loan sharks for the hard-working farmers.
Now, he said, LSE would provide a unique spot commodity trading platform through a combination of exchange technology and systems with the mobile payment system. In this regard, LSE is in advanced talks with many potential partners to establish the platform in this calendar year.
An application for the formation of a company has been pending with the Securities and Exchange Commission of Pakistan (SECP) for quite some time and Chaudhry said if the request was not approved, then LSE would set up the exchange under cooperative society’s regulations.
Expressing his views, Andrew Gastaldello said mobile technology had the potential of bringing the next big change in the business of exchange platforms just as the Big Band had brought revolution in trading environment of the London Stock Exchange.
He said Utiba was uniquely positioned to help the domestic exchange industry to innovate further and aim for a far greater access to a very large mobile subscriber base in Pakistan.
According to him, Utiba has spent more than a decade in developing leading mobile financial services solutions in the market, in pursuit of enabling everyone to make mobile payments.
Utiba is in use in more than 30 countries and its mobility platform supports 500 million subscribers and processes over 12 billion transactions per year.
Utiba, which is already providing mobile financial technology to Mobilink, is in advanced discussions with many other service providers. During the visit, the Utiba president is likely to call on finance minister and some other high officials.
Published in The Express Tribune, March 20th, 2012.