Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Pakistan Mercantile Exchange

|Includes: Exchange Income Corp. (EIFZF)

Pakistan Mercantile Exchange (previously known as National Commodity Exchange Limited) is Pakistan 1st and only accepted platform for Futures Trading bylaw technology traverse, web-based, demutualization commodity exchange. PMEX is licensed and regulated by the Securities and Exchange Commission of Pakistan and includes 100 percent Institutional shareholding.

Pakistan Mercantile Exchange Limited begins its operations in May 2007 as a totally electronic exchange on a national scale. PMEX is dedicated to offer a world-class commodity futures trading platform for traders to trade in an exceedingly wide range of commodity derivatives, driven by finest international practices, professionalism and transparency.

Pakistan Mercantile Exchange's shareholders are National Bank of Pakistan holding 9 Million shares (47.4%), Karachi Stock Exchange with 3.64 Million shares (19.2%), Lahore Stock Exchange with 2.27 Million shares (11.9%), Islamabad Stock Exchange with 2.27% shares (11.9%), Pak Kuwait Investment Company (Pvt.) Ltd with 0.91 Million shares (4.8%), and Zarai Taraqiati Bank Limited also holds 0.91 Million shares (4.8%).

Pakistan Mercantile Exchange Limited has six commodities for trading namely Gold, Silver, Crude Oil, Rice, Sugar, and Palm Olein and different contracts in Gold, Silver, Crude Oil, Rice, Sugar, Palm Olein, Wheat, and Kibor. So as to counter the requirements of various market investors, PMEX offers diversified contracts in every commodity in terms of lot volume and tenor. Market participants have 2 ways of trading. First they can directly access to the market and second they can place orders through brokers.

Over the last several years PMEX has established a strong track in running and offering international commodities in Pakistani market particularly in gold, silver and crude oil. For the period of 2010-2011, the traded volumes expand to Rs. 490 Billion from Rs. 63 Billion from the preceding year (671 % growth) gaining 245 new investors as twenty new brokers started their company and added in new customers. This shows that PMEX is gaining the credibility from investors.

During 2011 a descending trend in commodity value was seen regionally and internationally. Commodities reported 1st yearly drop ever since 2008, by decrease in cotton, copper and cocoa. Bumper crops conjugate with low demand. Silver and Cotton prices decreased to 10 % and 41.3 %. However, even though the solid decline in value of the commodities, Food Price Index (FFPI) reported 42 points up in 2011 from 2010 (increased by 23 %). Gold the noticeable performer hits the highest point US $ 1,900 per troy ounce when investors quickly invest in gold which is taken as a secure investment in era of economic insecurity. Metal and Oil prices increased to 10 % and 8 %. PMEX surpass the collective volumes of the Stock Exchanges. A record of trading volume of Rs.68 billon as compared to stock exchange's monthly trading volume of Rs.66 billion was reported. PMEX commodity index declined to 4.21 in 2011 that relies on 6 commodities; Gold, Silver, Crude Oil, Rice, Sugar and Palm Olein.

Recently in 2012 PMEX proclaim the listing of the gold 10 Ounces Futures Contract to provide more levels for the active traders. Announcement on the beginning of trading with Sugar Futures Contract also initiate great pace in the local commodities portfolio of Pakistan. According to the MD of Pakistan Mercantile Exchange, "over the next five years PMEX will focus on developing domestic agricultural markets".