The share of top five stockbrokers in key stocks futures is in the range of 23 to 32 percent. This was stated in a research note made by Jahangir Siddiqui Capital Markets. In a recent development, broker-wise open interest position is made available for the investors by KSE on daily basis.
In this way, investors can get a rough idea of the exposure of top brokers in futures market.
Open interest reflects gross outstanding position on either side of transaction (buy or sell) in futures market by all participants. In simple words, the value purchased is always equal to the value sold, says the JS Research report.
As Friday's data was not provided by KSE, the analysis is based on Thursday's data. "While doing this analysis we have followed the same general assumption, as discussed above, to take only half of the brokers' exposure in the futures market to avoid double counting," writes JS Researcher.
THE OUTCOME OF THIS EXERCISE IS VISUALIZED IN THE TABLE:
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Future Brokers'
scrips concentration Total open interest
Top Top Top (Rs bn)
1 2 3
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PPL-AUG 9pc 21pc 30pc 1.81
PTC-AUG 5pc 15pc 23pc 1.60
OGDC-AUG 10pc 21pc 31pc 1.23
PSO-AUG 8pc 20pc 28pc 1.07
POL-AUG 9pc 23pc 32pc 0.77
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"On Friday, the highest open interest was observed in PPL-August that stood at Rs 1.81 billion. Our analysis reveals that the concentration of top brokers in PPL-August was 9 percent, while the combined concentration of top 3 and top 5 brokers was 21 percent and 30 percent, respectively. PTCL-August with second highest open interest of Rs 1.60 billion attracted 5 percent concentration of top broker."
Top 3 and top 5 brokers cumulatively held a respective 15 percent and 23 percent exposure in PTC-August.
The analysis also shows that the exposure of top broker in each of these five scrips was more than 5 percent. Highest concentration of top broker was 10 percent in OGDC-Aug, which has a total open interest of Rs1.23 billion on Friday.
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