KSE unveils revised list of firms eligible for CSFC trading

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KARACHI – The Karachi Stock Exchange (KSE) Tuesday issued a revised list of the companies eligible for trading in Cash Settled Futures Contract (CSFC) market. Through a notice (KSE/N-326) the bourse notified the members the names of some 38 securities declared eligible for the CSFC trading in the equity market.
The KSE list for eligible securities include some 30 old, new and outgoing companies that according to KSE criteria must be other than Asset Management Companies (AMC), mutual funds and brokerage houses. The old firms include Allied Bank Limited, Adamjee Insurance, Askari Bank, Azgard Nine, Bank Al-Habib, DG Khan Cement, Engro Polymer, Engro Corporation, Fauji Fertilizer Bin Qasim, Habib Bank,
Hub Power Company, ICI Pakistan, Kot Addu Power Company, Lucky Cement, MCB Bank, NBP, Nishat Mills, Nishat (Chunian) Limited, Nishat Power Limited, NetSol Technologies, Oil and Gas Development Company, Pak Re-Insurance Company, Pakistan Oilfields, Pak Petroleum, Pakistan Telecommunication Company Limited, Sui Northern Gas and United Bank Limited.
Of these companies, Allied Bank, Engro Polymer, Habib Bank, ICI Pakistan, Nishat Mills, Nishat (Chunian), Nishat Power, Pak Re-Insurance and Sui Northern Gas limited are newly introduced securities. Attock Refinery and Bank Al-Falah Limited are outgoing companies; the notice indicates that this would be implemented from March 2011 for the seven day contract trading and May 2011 for the 90 days contract trading.
Acting under Clause 4 (iii)(a) of the relevant regulations, the KSE also declared the following 11-point criteria on the basis of which the firms were selected.
1. Companies that have average daily impact cost of less than one percent based on daily Impact Cost on an order size of Rs 500,000 during the review period.
2. Companies that have traded on more than 90 percent trading days during last three months of the review period.
3. Companies having average daily turnover of more than 250,000 shares during the review period.
4. Companies that have market price above par in at least 50 percent of the review period.
5. Companies that have free float of more than 20 percent of issued capital or 45 million free float shares.
6. Operating profit before tax in each of the last two years of operations.
7. Securities of asset management companies, mutual funds and brokerage houses shall not be eligible.
8. Companies that do not have negative opinion in auditors’ report on the companies financial statements (last audited report).
9. Companies that are subject to any investigation by any regulatory body.
10. Companies not on the defaulter-counter and have no pending inquiry against them by the authorities.
11. Free Float of the company must be in dematerialised form on CDS.
The list has also been communicated to SECP, acting MD of KSE, MDs of LSE and ISE, CEOs Central Depositary Company of Pakistan and National Clearing Company of Pakistan and the heads of I.T Division and Operations of the KSE.