KARACHI - Launch of trading government securities on the stock exchanges is part of the strategy to diversify investors’ base and provide an additional platform to the small or retail investors to buy government securities, in addition to other initiatives already underway.

This was stated by Federal Minister for Finance Mohammad Ishaq Dar while addressing the launching ceremony of Government Debt Securities, here on Tuesday.

Finance Minister said the new trading platform of Government securities will operate alongside the existing OTC platforms in the interbank market. This would enable competitive pricing structure at the retail level and create greater transparency.

Dar said, for individual savers and investors, this is an excellent opportunity to invest in Government of Pakistan debt securities which provides both superior return as well as higher liquidity than many comparable maturity financial instruments. Inclusion of Government securities in the individual saver’s investment portfolio also reduces volatility in portfolio value.

The Government of Pakistan to improve the liquidity in the Debt and Capital markets and diversify the investor base of government & corporate debt markets. This will further facilitate to channelise the savings of the end investors directly to debt instruments and may bring more efficiency in the process. In this context SBP and SECP have taken several initiatives in the past, he added.

He said that it is now the responsibility of financial market participants – both banks and non-bank financial institutions and stock market brokers – to make this a success. I also hope that the management of the stock markets will coordinate the efforts of the market participants and help in creating awareness among retail investors. The Government is doing its part in providing a major impetus for capital market development by launching on Tuesday the Government securities trading on stock exchanges.

I strongly urge all financial market participants including commercial banks, development finance institutions, the securities industry, insurance companies and pension funds and the asset management industry to help develop the Government securities segment of the debt capital market so that savers & investors both domestically & internationally can participate in it with ease and convenience’ he added.

Both in the conventional and Shariah compliant modes – through the capital market investors can participate in building up of Pakistan’s infrastructure backbone.

‘I believe this is a first step in a long journey whose eventual destination is to develop deep and liquid bond markets to fund both public and private sector investment in Pakistan’, he added.