(check BATi)

The Karachi Stock Exchange (Guarantee) Limited’s clearing and settlement of negotiated deal market (“NDM”) trades through national clearing and settlement system “NCSS”


62 TFCs instruments list in karachi


Currently two rating agencies PACRA and JCR-VIS are operating in Pakistan. Income/Return structure of TFC Like bonds, TFCs are structured to provide regular income in the form of coupons.

Each bank is required to display daily sale and purchase prices of bonds at their main branches in major cities.WAPDA, NDFC, BEL, PICIC, and some other firms have also issued non-government corporate bonds and certificates. All bank have their TFCs.

Trading is very limited. Investment banks which were expected to play a major market-making role have not succeeded in doing so. 62 TFCs instruments have been issued on the KSE during 1996-2003(21 of these were issued in 2002-2003). The secondary market is shallow and largely confined to the public debt sector. The range of financial assets available is limited. The growth of the secondary market has been restricted by the expansion of the national saving schemes (NSS), which are very popular with the public.

The coupon rate on floating rate TFCs is set at a risk-free benchmark rate plus a risk spread to reflect the relative risk of the instrument. The risk-free benchmark is typically the SBP’s discount rate, or the auction yield on the Pakistan Investment Bond (PIB) of equivalent maturity.

Floating rate TFCs may impose caps and floors on the coupon payments.

A listed TFCs is trade able at the exchange where it is listed. In fact, legally, a listed TFC can only be traded on the exchange at which it is listed, through a licensed member of that exchange.

Unlisted TFCs are not trade able on an exchange, but may be traded through negotiation directly between buyers and sellers. Unlisted TFCs may, therefore, be less liquid than listed ones, in which case they would offer a liquidity risk spread over comparable listed TFCs.


The rating reflects, in the opinion of the rating agency, the credit risk of the TFC, i.e. the issuer’s ability and commitment to repay scheduled TFC payments. PACRA and JCR-VIS are the two rating agencies presently operating in Pakistan.










How are listed TFCs traded in the secondary market?


To trade listed TFCs you would need to approach a broker licensed to deal on the exchange on which the TFC is listed. The basic features of secondary trading are as follows:


Trading: Bid (buying) and offer (selling) prices for TFCs listed on the KSE may be found on the Bond Automated Trading System (BATS). Quotes for TFCs listed on the Lahore Stock Exchange (LSE) may be found on the trading system of the LSE.


Trading lot: The trading lot for a TFC is one unit and multiples thereof.  Typically, one unit has a face value of Rs,5000.


Delivery: TFCs may be traded in both physical (paper) and electronic form. Like shares, physical TFCs are delivered with attached transfer deeds, properly signed and verified. Alternatively, TFCs may also be delivered in electronic form through the Central Depositary System (CDS). The CDS is an electronic share/certificate register operated by the Central Depositary Company (CDC).


How can I buy/sell TFCs through Taurus Securities?

Taurus Securities is a leading corporate member of the Karachi Stock Exchange (KSE). Through us, you can buy and sell TFCs listed and traded on the KSE. In addition, through our affiliates in Lahore, we can provide you with access to TFCs listed and traded on the Lahore Stock Exchange.

You can buy/sell TFCs through Taurus Securities via the following simple process.


You contact our TFC dealing desk, specify your requirements (buy or sell), and ask for current market quotes.


The various types of Government bonds issued by the Govt. of Pakistan are as follows:


Pakistan Investment Bonds

US Special Dollar Bonds

Wapda Bonds

National Saving Bonds

and Sukuk


Corporate Bonds


Corporate Bond is a debt security which is issued by company and sold to investors to meet its financial requirements. In Pakistan this is commonly known as Term Finance Certificate (TFC). Corporate Bonds are normally issued for a specified time period with an assurance to return the principal amount of the bond money including interest to the bondholder.


When someone buys a bond, he/she is lending money to the company that issued it. The company ensures to return the money, on a specified maturity date. Till that time, it also pays a stated rate of return, which usually occurs semi-annually. The interest payments collected from corporate bonds are taxable. Unlike shares, bonds do not provide an ownership interest in the issuing company