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KSE to initiate Stock Index Futures Contracts in Oil and Banking sector – Alfalah Securities Limited

Karachi: The Karachi Stock Exchange (KSE) would launch “Stock Index Future Contracts” on tradable sector indices in the Oil & Gas and banking sector which would commence from January 2012.

According to Alfalah Securities, the Oil & Gas sector would include OGDC, PPL, POL and PSO having a free float of 89% of the overall sector float whereas, stocks from the banking sector includes MCB, ABL, UBL, NBP, HBL, BAHL, BAFL having a free float of 82% of the entire sector float have been short listed for the futures contract. The tradable sector index futures is a step in developing the capital markets of the country as it provides an opportunity to the investors to invest in specific sectors without actually buying stocks of each sector individually.

The investors would be charged mark-to-market losses to be paid daily with a cash settlement amount of PKR 5 per index movement and would be completed on maturity. Moreover, the stock index futures contract would enable the investors to invest in a specific sector with a value of PKR 50,000 and an initial margin of 12.5% (PKR 6,500).

Market Outlook:
Sell on strength.

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