Home / Interviews / An interview with Ejaz Ali Shah, managing director, PMEX
An interview with Ejaz Ali Shah, managing director, PMEX

An interview with Ejaz Ali Shah, managing director, PMEX


Pakistan Mercantile Exchange Limited (PMEX) is Pakistan’s first and only multi-commodity futures exchange, which is licensed and regulated by the Securities and Exchange Commission of Pakistan (SECP). Shareholders of PMEX include National Bank of Pakistan (NBP), Pakistan Stock Exchange Limited (PSX), ISE Towers REIT Management Company Limited, LSE Financial Services Limited, Pak Brunei Investment Company Limited, ZaraiTaraqiati Bank Limited and Pak Kuwait Investment Company Limited. The Exchange offers a diverse range of domestic and international commodities and financial futures. With a sophisticated infrastructure based on state-of-the-art technology, PMEX provides a complete suite of services i.e. trading, clearing and settlement, custody as well as back office, all under one roof. PMEX’s international affiliations include Memberships of Association of Futures Markets (AFM), Hungary & Futures Industry Association (FIA), USA and Memorandum of Understanding (MoUs) with Borsa Istanbul, Izmir Commodity Exchange, Dubai Gold & Commodity Exchange and Iran Mercantile Exchange.


In the last 2 years, with the support of Securities & Exchange of Pakistan & the PMEX Board of Directors, the Exchange has been successful in expanding the product suite, inducting new members & market makers, increasing its footprint in Lahore and Islamabad by opening branches, creating awareness among the market participants about futures trading and building strategic collaboration with a number of international exchanges. The outcome is very encouraging as the trading volume of the Exchange is improving consistently due to listing of new products, active participation of brokers and increase in number of active traders on the Exchange platform.


To provide an enriched product suite to market participants, several new products have been introduced in the last 2 years. These products included cash settled futures contracts of Copper, Brent Crude Oil, Platinum, Natural Gas, US Equity Indices, new FX Pairs and deliverable contracts of Red Chilli, Paddy Super Basmati Rice. The listing of new products at the Exchange not only helped the brokers to attract new business but also provided portfolio diversification opportunities to the market participants.

At present, the Exchange offers 21 commodities of different denominations which can be clubbed into four main asset classes: metal, agriculture, energy and financial futures. Namely, these are: Gold, Oil (Brent & WTI), Silver, Copper, Platinum, Natural Gas, FX Pairs, US Equity Indices, Red Chilli, Paddy Rice and Wheat.


Mr. Ejaz Ali Shah is the Managing Director of Pakistan Mercantile Exchange Limited. He has over two decades of diversified experience in domestic and international financial markets. Previously, he served for 16 years as General Manager at Central Depository Company of Pakistan Limited (CDC). As a part of CDC’s founding team, Mr. Shah played a vital role in developing, positioning and nurturing CDC as a diversified service provider in Pakistan. Before CDC, Mr. Shah has served in Cordoba Corporation, USA and Fidelity Investment Bank Limited, Pakistan. He also served as the National Chair for International Public Relations Association (IPRA) for the years 2010-11.


The Exchange, has had a dedicated focus on listing physical deliverable futures contracts. With continued perseverance and support from all quarters, PMEX has been successful in developing a workable model for trading physical commodities and has launched deliverable Red Chilli, Wheat and Paddy Rice Futures Contracts. In this respect the Exchange worked with the following:

  • SGS Pakistan for quality certification
  • Agility Pakistan for warehousing and logistics
  • Pakistan Agriculture Collation for on-ground farmer facilitation

With the support of the above mentioned entities, PMEX established quality grades, storage and delivery mechanisms, farmer trainings, warehouse receipt issuance for bank financing, price data dissemination and trading mechanism. The Exchange is proud that its efforts has yielded positive results, which are summarized below:

  • Issues of quality, warehousing & price transparency were efficiently tackled
  • Opportunity was created for farmers to fetch better prices for their produce and receive timely payments
  • With PMEX being the central counterparty, the trust level of buyers/sellers has enhanced significantly
  • The platform positions our farm products to be sold in the international market

The Exchange achieved another milestone this year by arranging commodity based financing for the first time in the country against the warehouse receipt issued by PMEX as opposed to traditional mode of lending against the land papers. With the support of Habib Bank Limited (HBL) and ZaraiTaraqiati Bank Limited (ZTBL), financing against warehouse receipts was extended to local farmers. PMEX feels that this facility will go a long way in enabling the farmers to get better prices for their produce in coming years as they now enjoy the power to hold on to the commodity until the commodity prices become favourable for them and avoid distress selling.



Expanding Outreach of Agriculture Products

Going forward, capitalizing on experience attained in trading agriculture commodities, the Exchange plans to develop a global trading platformin collaboration with value chain partner such as exporters, assayers, clearing and forwarding agents and warehousing & logistics services providers, which would encourage foreign buyers to buy certified quality of agriculture commodities from Pakistan through PMEX trading platform.

PMEX is confident that the proposed trading mechanism will not only help the international buyers inprocuring certified qualities of Pakistani agriculture commodities in a transparent and efficient manner, but also the exporters to sell their produce in the global markets and fetch better price.

Introducing a New Trading System

Based on the experience gained over the last 10 years and advancements in the global futures trading, the Exchange is also focused on providing a new trading platform to market participants. A complete revamp of technology framework is underway which is aimed at providing a world class trading platform to the market participants. It is expected that the comprehensive roll-out of the new technology will take place by Q2 of 2018.

Introducing Commodity Murabaha

The Islamic Financial Industry is growing exponentially in Pakistan. However, the industry is facing difficulty in deploying the excess liquidity in an efficient manner due to unavailability of a reliable vehicle to do so. It is in this context that PMEX decided to step up and develop a Murabaha contract for the Islamic Financial Industry.

Once this product is launched, Islamic Financial Institutions will be able to conveniently deploy their liquidity bringing them at par with the conventional banks. PMEX has extensively discussed this product with major Islamic Financial Institutions who appreciated the efforts of the Exchange and are eagerly awaiting for the launch of the product. The product has also been reviewed and certified by a prominent sharia advisor to be fully sharia compliant.

PMEX feels that the keen interest shown by the industry is encouraging and is confident that the proposed Murabaha product would greatly strengthen the Islamic Financial Sector of Pakistan. The Exchange envisions that the proposed Murabaha product will eventually serve as an industry benchmark and could well become the instrument of choice for Islamic banks.

At present, all the modalities have been worked out and the Exchange is planning to launch the product as soon as it gets the necessary regulatory approvals.

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