Low volumes: SECP, KSE meet to develop rescue plan
A meeting was held here today between the Securities and Exchange Commission of Pakistan (SECP) and the Karachi Stock Exchange (KSE) to discuss the prevailing market situation and possible measures to be taken to address issues faced by the market in particular persistent low trading volumes and lack of retail participation.
The meeting was chaired by the Chairman SECP and attended by Chairman and member directors KSE Board, senior management of the Exchange and SECP, and senior market participants, according to a statement issued by the KSE.
The meeting discussed various developmental areas including KSE’s proposal for amendments in Deliverable Futures Market (DFM) and Margin Trading System (MTS).
The measures agreed for the Deliverable Futures Contract market included the withdrawal of the Mandatory Basic Deposit requirement to take part in DFM. It was also decided that Initial Margins will be collected 50% in eligible Securities and 50% in cash
It was also decided that a voluntary “Roll-over Facility” shall be allowed for DFM via a special window to be devised and provided by the Exchange for the purpose showing the rate of interest at which the transaction is offered to be rolled over.
In relation to MTS, the SECP consented to look into the possibility of allowing individual investors to take part in the MTS market as financiers. Also it was agreed that the Federal Prudential Regulations ratio shall be reviewed for accepting about 10% eligible securities within the overall 25% cash requirement while keeping the collection of mark to market margins in 100% cash.
Further, in order to encourage and enhance the trading activity in various market segments it was agreed to review the existing list of eligible scrips in the MTS DFM, and Margin Financing with a view to increase the number of securities in this list, for augmenting the same.
Published in The Express Tribune, July 11th, 2011.
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I think its too late to address these things. many retail investors have gone and remaining are working on exit plans. GOD help us......