Presentation on PMEX
PMEX @ 2011
Background
• Pakistan’s first and only Commodity and
Futures exchange
• Regulated by SECP
• Demutualised exchange
• All-electronic exchange
• Best Risk Management Practice in the
country
• Open membership
• 100% institutional shareholding
Current Shareholding
Shareholders Shares (millions)
NBP
9.00
KSE
3.64
LSE
2.27
ISE
2.27
PKIC
0.91
ZTBL
0.91
Total
19.00
%age
47.4%
19.2%
11.9%
11.9%
4.8%
4.8%
100%
PMEX Milestones
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Company formed in April 2002
Management Appointed in Oct 2003
Became Operational in May 2007 with Gold Futures Contract
First Physical Gold Delivery in Aug 2007
Launched IRRI-6 Rice Futures in Mar 2008
Launched Palm Olein Futures in Jun 2008
Launched Kibor Futures in Jan 2009
Overtook ISE in terms of volumes in May 2009
NBP became shareholder in Sep 2009
Crude Oil and Silver Futures listed in Nov 2009
Overtook LSE in Apr 2010
Linked with KATS
June 2010 - Second Biggest Exchange of Pakistan in terms of
Traded Volumes
• Biggest Exchange in terms of Membership
Hard Part is Over
• The hard part of setting up the exchange is over:
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Laws, Rules and Regulations
Regulatory approvals
Human Resource development
Product development
Membership base
In-house software for all exchange operations i.e. trading,
clearing & settlement, risk management
– In-house brokerage software solution
– Fully functional market-making model
• 4 year operational track record
• Strong foundation now in place for business growth
NCEL © 2010
Current Product Portfolio
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International Commodities
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Gold
Crude Oil
Silver
Palm Olein
Domestic Commodities
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IRRI-6 Rice Futures Contract
Financial Futures
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KIBOR Futures Contract
Products in Pipeline
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Sugar – May 2011
Wheat – with SECP for Approval
NY Cotton – with SECP for Approval
Currency Futures – with SECP for Approval
Maize – Board Approval by end of May
Basmati within 3 months
Domestic Cotton within 6 months
Target to have 5 major agri products trading before end 2011
Research on Copper, Steel Futures
Futures on Refined Petroleum Products
T-Bill, PIB Futures
Carbon Credits
Recent Developments
• Joint project with SBP for National Warehouse
Management Company completed. PMEX will
be part of Electronic Warehouse Receipt
Issuance Company
• Government of Punjab and Planning
Commission key supporters for Agri products
• Mutual Funds actively designing commodity
funds
Warehousing & Infrastructure
• Working on a joint initiative with SBP
• Warehousing management company with two objectives:
– Commodity Financing
– PMEX delivery mechanism
• Company will manage a national network of warehouses
– Warehouse receipts
– Quality testing and Certification
– Physical storage
• Company design finalised
• USAID study completed
• Potential operators or management companies contacted
• Potential partners including banks and insurance companies and
large corporates contacted
• Punjab government engaged
PMEX Drivers & Advantages
• Vast range of potential customers:
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Financial
Agricultural
Industrial
Individual/Retail
Government
• PMEX - a catalyst for new types of businesses
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Commodity Funds
Commodity Brokerages
Commodity-linked structured products
Commodity Financing
Warehousing and Collateral Management
PMEX Drivers & Advantages
• Technology
– Low Cost of Trading
– Bigger Reach (Geographical & Numerical)
– Scalability
• Market Making
• Deep Liquidity
Favourable Timing
• Definite shift of growth focus from developed to
developing Markets
• Commodities have evolved as a major factor in global
economic growth
• Commodities are now established as a major asset class
for investors
• Pakistan - large agricultural economy
• Increased interest of government
• Increased interest of the private sector
• Increased interest of multilateral agencies (USAID, WB,
ADB, etc)
• Critical need for developing proper commodity markets
www.pmex.com.pk