KARACHI: The Karachi Stock Exchange is expected to raise the curtain on money market with trading in listed Term Finance Certificates (TFCs) to start early next month.

‘The initiative will provide transparency and price discovery in the trading of TFCs, which currently is not possible because of buyer-to-buyer change of hands,’ says Zafar Moti, director on the board of KSE.

He said that the TFCs would provide a broader base to the capital market, enabling investors the choice of going into debt or equity.

Bond trading is an essential part of capital markets world over. ‘Volume of business in bond market is seen to be almost ten times that of stocks,’ says Mr Moti.

Some market participants believe that the trading in TFCs could begin as early as on Nov 2, but the KSE director said that though he could not specify a date, another ‘mock’ session was likely to be held before the actual trading begins; the first mock session was held last month.

The previous week KSE issued a notice asking members desirous to participate in the trading of debt market securities to apply ‘now’ to get their KSE Bond Automated Trading System (BATS) terminals/installed/activated by submitting a request to the exchange.

The KSE had noted that all development & regulatory work regarding the matter had been completed and ‘go-live’ date for trading of debt market Securities (listed TFCs) was to be announced ‘very soon.’

It is learnt that in the first phase institutions would be allowed to enter the arena; individual investors would then follow. Presently, small investors who wish to go into trading in debt instrument can enter through the income funds.

With the secondary market alive, trading in TFCs would be transparent in regard to the buyer and seller and price would also be open to public view.

MARGIN ELIGIBLE SECURITIES: The KSE announced on Friday that the SECP had accorded its approval on revised list of 60 margin eligible securities, which would be effective from Nov 2.

The bourse stated that the approval was given on the proposal by the KSE for development of capital markets in the New margining regime.