KARACHI (September 03 2009): The board of directors of Karachi Stock Exchange (KSE) is likely to finalise on Thursday arrangement for the launch of a leverage product at the exchange. An informal meeting of KSE board is scheduled to be held here on Thursday, where both concept papers of margin financing and CFS would be discussed, sources said.

Besides, for the launch of any leverage product the board is also considering enhancing circuit breakers from existing 5 percent upper and lower locks on share prices to a certain level, sources added. It is learnt that a new idea to introduce 'Market Halt' to close the market at certain level in any circumstances would also be discussed at the board meeting.

Sources said that after discontinuation of CFS Mk-II from April 8 this year, there were two different proposals from separate forums to introduce a new leverage product in replacement of CFS Mk-II. The Consultative Group, formed by the Securities and Exchange Commission of Pakistan (SECP), gave the idea to introduce Margin Financing. However, the Market Affairs Committee of KSE gave the proposal to re-launch CFS. The committee was of the view that the Margin Financing would not be able to cater investors' needs.

Copyright Business Recorder, 2009