Pakistan Equities Advance on Regulator's Meeting to Discuss Margin Trading
Pakistan’s benchmark stock index rose, set for a five-week high, after the Securities and Exchange Commission said it will evaluate a plan tomorrow for investors to trade shares using money borrowed from brokers.
The Karachi Stock Exchange 100 Index climbed 2 percent, the biggest advance since Aug. 31, to 10,075 as of 1:19 p.m. local time. The commission’s board will meet tomorrow to discuss a proposal to allow margin trading, spokesman Muhammed Rab Nawaz Awan said today, declining to give details.
The board of the exchange proposed the introduction of margin trading in a report to the commission in July, and met with the regulator on Aug. 31. The practice was abolished when price curbs were imposed in 2008, following the index’s biggest slump in a decade.
“It will bring life to the market,” Dawood Jan Muhammed, a member broker at the exchange, said in a telephone interview from Karachi. “We are expecting approval by the regulator in this meeting, since it has already been delayed for a long time.”
Oil & Gas Development Co., the nation’s biggest explorer of fuels, rose 1.7 percent to a five-week high of 148 rupees. Pakistan Petroleum Ltd., the nation’s biggest producer of natural gas, rose 1.2 percent to 212.82 rupees, its highest since March 15, 2005, and National Bank of Pakistan, the biggest by assets, rose 3.8 percent to 65.62 rupees.
“Investors are excited because margin trading will help increase volumes in the market,” said Abdul Azeem, a research analyst at Invest Capital & Securities Ltd. in Karachi.