KARACHI: The Pakistan Mercantile Exchange (PMEX) will roll out “within a month” the beta version of an e-commerce platform that’ll help commodity producers sell their merchandise directly to global buyers.

A wholly owned subsidiary of the country’s only futures exchange, the Global Commodity Trading Platform (GCTP) will operate “just like Amazon”, said PMEX Managing Director Ejaz Ali Shah while speaking to Dawn on Wednesday.

The GCTP will allow Pakistani sellers of both agricultural and non-agricultural merchandise to transcend traditional trade finance mechanisms like letters of credit, he said.

“The buyer will be able to select a commodity, volume and price on the portal. It’ll also be able to access a complete logistics suite on the same platform without worrying about containers, shipping lines, tracking and certifications. It’ll be a one-window solution,” he said.

The platform has handled a few transactions on a test basis. The beta run of the GCTP will consist of a dozen or so transactions, which will be followed by a full-fledged rollout of the e-commerce platform.

In addition, Mr Shah said the PMEX is actively working on introducing the trade of treasury bills and Pakistan Investment Bonds (PIBs) on the mercantile exchange. “Unlike the Pakistan Stock Exchange that’s dominated by institutions, about 99 per cent of our clientele is retail. Bringing the trade of government papers to the PMEX will mean bringing it to the retail level,” he said.

Other plans include the introduction of futures contracts for digital gold and single stocks, such as blue-chip US firms like Apple, Alphabet, Microsoft, Meta and Tesla. These single-stock contracts will be cash-settled in the local currency while the price quotation will be in dollars. In other words, the product will let local investors invest in the futures contracts of US blue-chip companies without any foreign-exchange risks.

According to unaudited accounts, the PMEX posted a net profit of Rs207 million in 2022-23, resulting in the full recovery of its equity of Rs313.6m, which stood at negative Rs192m back in 2010-11. The trading volume clocked in at Rs4.6 trillion, up 20.2pc from a year ago.

About 1,500 individuals with approximately 34,000 unique identification numbers (UINs) are active on PMEX on any given day. Mr Shah said the number of investors is “pitiful” at the moment.

“There’re more than 55m bank accounts in Pakistan. We believe it gives us an opportunity to generate two to five million new UINs and achieve widespread penetration across Pakistan,” he said.

Published in Dawn, July 20th, 2023