Cross-listing: KSE takes leap forward, may list at BSE SENSEX

Focuses on futures contracts, appoints AKD as market maker.

KARACHI: The Karachi and Bombay stock exchanges are in advanced stage of talks for cross-listing of indices on each other’s bourses, disclosed KSE Managing Director Nadeem Naqvi on Wednesday.

“KSE wants to list its 30-index on BSE. We are also in talks with the Dubai Financial Market and Abu Dhabi Securities Market for cross-listing of indices,” said Naqvi while speaking at a press conference at the bourse.

He pointed out that Pakistan’s bourses have always been looking at western markets for investments, but circumstances have changed with the emergence of India and China as big emerging market players.

On the local front, he said, the KSE-30 index will be listed on the Lahore Stock Exchange (LSE) soon after getting approval from the regulator – the Securities and Exchange Commission of Pakistan (SECP).

Naqvi also announced that the KSE has appointed AKD Securities as market maker for the KSE-30 stock index futures with the hope that activity in futures contracts will support and stabilise the market.

However, he made it clear “one should not expect that this step will trigger any immediate response. I believe this will create activity in the next six to eight months like the slow initial progress of leading Indian stock markets when they introduced futures contracts more than a decade ago.”

Today, the same unknown futures contracts in Indian bourses are eight times the spot trading there, he said.

“KSE also intends to introduce an auction programme, which will be a game changer for the bourse,” said Naqvi. AKD Securities has committed to execute a minimum of 100 contracts daily, increasing these up to 500 a day within six months.

Published in The Express Tribune, August 30^th, 2012.