ISLAMABAD - The three stock exchanges of Karachi, Lahore and Islamabad were yesterday formally merged into a single stock exchange, a step taken to increase the foreign investors’ interest in the stock market of the country.
“It is a historic day for Pakistan and a milestone in the history of Pakistan’s financial and capital markets,” said Finance Minister Ishaq Dar as he launched the Pakistan Stock Exchange (PSX).
It took 15 years to reach this point, he said while addressing the inauguration ceremony. PSX would play major role in the country’s economic development and consolidation of its gains, he added.
He revealed that Saudi Arabia is also interested in making China-like investment in Pakistan. “Saudi Deputy Crown Prince and Defence Minister Prince Mohammad bin Salman during his visit to Pakistan on Sunday has discussed the investment plan with us,” he added.
Dar went on to explain that formation of PSX was part of the vision of the present government and expected that it will play a major role towards achieving the desired economic growth agenda of the government.
Under the plan the PSX would become a listed company on the exchange with 40 percent of its shares offered to foreign buyers – 20 percent in an initial public offering (IPO) and the remaining 40 percent allocated to listed brokers.
Foreign investors could already trade on the existing exchanges, but the new bourse would be better organised with greater international links, the economists said.
With completion of the process, the capital market will enter into a new era of growth and development as it will encourage wider participation of all classes of investors, they opined.
Dar also highlighted the economic achievements of the incumbent government. As many as 22 foreign institutions have termed Pakistan’s economy stable, he said, and added that country’s foreign exchange reserves are enough to cover import bill for at least six months. Pakistan’s rating has been revised to positive from negative.
SECP Chairman Zafar Hijazi in his address highlighted that the SECP had succeeded in providing a favourable environment and creating consensus of the stakeholders on the integration of the three exchanges, without which strategic investment was not possible.
He stressed that the PSX must act towards achievement of objectives of its establishment and strive to gain absolute confidence of domestic and foreign investors for mobilizing capital for economic growth. For this purpose, PSX must demonstrate the highest standards of governance, transparency, ensure the best technology and availability of innovative products for competing in today’s globalised world.
PSX Chairman Munir Kamal said the formation of single stock exchange was a watershed event for the country’s capital market. He said due to rapidly improving economic situation of the country, not only local investors but the foreign investors were also taking keen interest in the Pakistan’s capital market.