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COMMODITY MARKET: Commodity market refers to markets that trade in primary rather than manufactured products.

A physical or virtual marketplace for buying, selling and trading raw products. Commodities are split into two types: Soft commodities are agricultural products such as wheat, coffee, cocoa and sugar. Hard commodities are mined, such as (gold, rubber and oil). Futures contracts are the oldest way of investing in commodities. HISTORY OF COMMODITY MARKET IN PAKISTAN: In Pakistan the commodity futures market is still not very wide spread. The first commodity futures exchange; National Commodity Exchange of Pakistan, was incorporated on April 20, 2002 and it started functioning in the July of the year 2003 Initially the gold was the only trading commodity and the rest of the commodities; wheat, rice, sugar, cotton yarn, etc. were started trading later in phases. The establishment of the exchange is the continuation of economic policies of the government to stimulate investment in the country, regulate trading in commodities and document the national economy.

PMEX

(origin) :Pakistan Mercantile Exchange, changed its name in March 2011 from National Commodity Exchange to broaden its scope of activity, is now open almost round the clock and growing at a rapid pace with the trading in Gold, Silver and Crude Oil. The name change has been decided with a view to communicating more accurately our mandate as a nation wide commodities and futures exchange. The new name also reflects more accurately the wide variety of our current and planned business lines and products, said Mr. Samir Ahmed in the press communiqu Pakistan Mercantile Exchange Limited (formerly National Commodity Exchange Limited - NCEL) is the first technology driven, web-based, demutualized commodity exchange in Pakistan. It is licensed and regulated by the Securities and Exchange Commission of Pakistan and has a 100 % Institutional shareholding. Operations:Pakistan Mercantile Exchange Limited started its operations in May 2007 as a fully electronic exchange with nationwide reach. PMEX is committed to provide a world-class commodity futures trading platform for market participants to trade in a wide spectrum of commodity derivatives, driven by best global practices, professionalism and transparency.

MEMBERS:The Membership of Pakistan Mercantile Exchange is open to all. Currently there are more than 300 members registered on the Exchange and the number is growing every month. The members include brokerage houses, individuals and industry specialists ranging from traders to exporters and importers and commodity specialists. SHAREHOLDERS:Pakistan Mercantile Exchange has an Institutional shareholding and the shareholders include National Bank of Pakistan, Karachi Stock Exchange, Lahore Stock Exchange, Islamabad Stock Exchange, Pak Kuwait Investment Company (Pvt.) Limited, and Zarai Taraqiati Bank Ltd. TRADING HOURS:The Exchange recently increased its timings and now operates 21 hours. The increase in trading hours is important at this time as the international market is ticking very fast and investors in Pakistan also get the opportunity to be part of the global activity from a regulated platform whereby they benefit from the commodity price trends and have the ability to hedge their trades. Commodities traded Pakistan Mercantile Exchange (formerly National Commodity Exchange Limited - NCEL) initially started

trading in Gold only. This listing was followed by the first gold physical delivery in August 2007. Additional Products were subsequently launched IRRI -6 rice in March 2008 Palm Olien futures in June 2008 and KIBOR futures in Jan 2009. Crude Oil and Silver contracts were listed in Nov 2009. Recently the Sugar contract was also added in June 27, 2011. The main commodities traded on the Exchange have been Gold, Silver and Crude Oil. There are various contracts in each. Gold has eight contracts namely Gold 1 ounce, Gold 100 ounce, Gold 1 Tola, Gold 50 Tola, Gold 100 tola, Gold Kilo, Gold 100 gms, and Minigold 10 gms. Tola gold and minigold are deliverable contracts. Furthermore there are two contracts in Silver 100 ounce and 500 ounce and two contracts in Crude Oil 10 barrels and 100 barrels. The smaller lot sizes for Silver and Crude Oil were introduced very recently in June 2011.

CONCLUSION:PMEX offers a platform where growers, producers, processors, traders, exporters, importers and investors can trade with ease. By providing a transparent and regulated market, it enables proper price discovery and enables participants to invest and hedge themselves

against the price volatility of agriculture and nonagriculture commodities. This increasing growth is coming about as a result of newer products, low transaction costs, tight spreads, deep liquidity, growing membership and efficient systems of PMEX that make it very easy for brokers and their clients to transact and manage their trades.

COMMODITIES TRADED ON EXCHANGE CATEGORIES Precious metals Petroleum Agricultural products CONTRACTS AVAILABLE FOR Gold, Silver Crude oil Palm oil, Cotton, Wheat and Rice & Sugar, (maize (upcoming) ) KIBOR 3-months

Financial futures

COMMODITIES FUTURES CONTRACTS ON PMEX


Commodity Gold Gold KILO 50 Tola Gold 100 Tola Gold Minigold TolaGold Rice IRRI-6 Palmolien KIBOR 3M Gold (1 Ounce) Gold (100 Ounce) Crude Oil (10) Crude Oil (100) Silver (100) Silver (500) Weekly IRRI-6 Market Open 05:00 am 05:00 am 05:00 am 05:00 am 05:00 am 05:00 am 09:00 am 09:00 am 09:00 am 05:00 am 05:00 am 05:00 am 05:00 am 05:00 am 05:00 am 09:00 am Market closed 02:00 am 02:00 am 02:00 am 02:00 am 02:00 am 02:00 am 05:00 pm 05:00 pm 06:00 pm 02:00 am 02:00 am 02:00 am 02:00 am 02:00 am 02:00 am 05:00 am Closure on Expiration 05:00 pm 05:00 pm 05:00 pm 05:00 pm 05:00 pm 05:00 pm 04:00 pm 04:00 pm 12:00 pm 05:00 pm 05:00 pm 05:00 pm 05:00 pm 05:00 pm 05:00 pm 04:00 pm

DURATION OF FUTURES CONTRACTS AVAILABLE ON PMEX

FUTURES CONTRACT OF PMEX


1.

DURATION OF CONTRACTS
March, May, July, October and December

PMEX International Cotton (ICOTTON-MY13) Futures Contract PMEX 10 Ounces Gold Futures Contract

2.

At any date, a minimum of 3 concurrent month contracts will be active

3.

PMEX Gold 100 gms Futures Contracts

At any date, a minimum of 3 concurrent month contracts will be active

4.

PMEX One Tola Gold Futures Contract PMEX 1 Ounce Gold Futures Contract PMEX 100Ounces Gold Futures Contract PMEX 100 Tola Gold Futures Contract

One week per contract

5.

Three months

6.

Three months

7.

At any date, a minimum of 3 concurrent month contracts will be active. At any date, a minimum of 3 concurrent month contracts will be active. At any date, a minimum of 3 concurrent month contracts will be active.

8.

PMEX 50Tola Gold Futures Contract PMEX Kilo (1.03264 Kgs) Gold Futures Contract

9.

10.

PMEX Mini Gold Futures Contract PMEX Silver (10 Ounces) Futures Contract

One week

11.

The number of active contracts at any time shall be three or more.

12.

PMEX Silver (100 Ounces) Futures Contract

Three months

13.

PMEX Silver (500 Ounces) Futures Contract

Three months

14.

PMEX Crude Oil (10 barrels) Futures Contract

First three calendar months.

15.

PMEX Crude Oil (100 barrels) Futures Contract

First three calendar months.

16.

PMEX RBD PALM OLEIN Futures Contract

At any date minimum of 3 concurrent months contracts will be active.

17.

Weekly IRRI-6 Rice Futures Contract

The Exchange will notify in advance the contract weeks available for IRRI6 Rice futures.

18.

IRRI-6 Rice Futures Contract

The Exchange will notify in advance the contract months available for IRRI6 Rice futures.

19.

PMEX Sugar Futures Contract

Contract months will be notified in advance by the Exchange.

20.

PMEX Wheat Futures Contract

Contract months will be notified in advance by the Exchange.

21.

PMEX 3-Month KIBOR Futures Contract

3-Month KIBOR Futures Contracts will be available for delivery in the Twelve Quarterly Expiries in the Mar, Jun, Sep, Dec cycle covering a period of three years

22.

PMEX Maize Futures Contract

Contract months would be made available at the discretion of the Exchange depending on the needs of the market.