ISLAMABAD: Foreign investment in the stock market exhibited a net outflow of $284.832 million during 2019-20 against $356.04 million in 2018-19, reflecting a decrease of 20 percent. According to the SECP annual report for 2019-20, 530 companies with paid-up capital of Rs1,391.477 billion were listed on Pakistan Stock Exchange (PSX) as on June 30, 2020. The KSE-100 Index began the year at 33,901.58 points and ended at 34,421.92 on June 30, 2020, ie, an increase of 1.53 percent since the beginning of the year. Market capitalisation was Rs6,529.707 billion on June 30, 2020, which is 5.19 percent lower than June 30, 2019 market capitalisation of Rs6,887 billion. In the beginning of FY 2019-2020, the KSE-100 witnessed a declining trend; however, positive recovery was witnessed towards the end of the financial year.
During the year, the KSE-100 touched its lowest level of 27,228.80 on March 25, 2020, and highest level of 43,218.67 on January 13, 2020.
The average daily turnover in ready and future markets was Rs196.364 million shares, and Rs79.277 million shares, respectively. Foreign investment in the stock market exhibited a net outflow of $284.832 million during the FY 2019-2020; however, it was 20 percent lower then the net outflows of $356.04 million observed in the FY 2018-2019.
However, despite all the turbulence and uncertainty, market operations were never halted even for a single day and settlements were executed smoothly in a timely manner that depicts strength and resilience of capital market in Pakistan.
Under the SECP's reforms, the SECP will establish National Business Centre(s) exclusively for business registration and creating awareness about the CRA and the CRC among corporate entities and legal practitioners for revival of distressed corporate entities or management of non-performing assets.
To review procedural requirements for registration of charges under the Companies Act, 2017, to consider practicability of making the companies registry of charges on movable assets a notice-based registry consistent with the Secured Transactions Registry established by the SECP under the Financial Institutions (Secured Transactions) Act, 2016, in order to move towards unification of both registries in line with the international best practices.
The SECP will introduce digital certificates for company incorporation for end-to-end digitisation of the incorporation process.
The SECP will establish a data exchange mechanism with Pakistan Single Window, an initiative taken by the federal government through Pakistan Customs and the Federal Board of Revenue (FBR) to introduce e-governance in the external trade sector.
The commission will review the Group Companies Registration Regulations, 2008, to simplify the requirements specified therein, and also review of the Public Sector Companies (Corporate Governance) Rules, 2013, consequential to the ongoing drafting of state-owned enterprises law by the federal government.
The SECP has proposed reinstatement of the cost audit requirement in cement, sugar, vegetable ghee and cooking oil, chemical fertiliser and wheat flour sectors under Section 250 of the Companies Act, 2017, pursuant to the recommendation received from the government.
The development of Risk-Based Supervisory Framework for corporate sector to enable proactive inspection or investigation of companies is also finalised.
The SECP will propose amendments in the Partnership Act, 1932, in coordination with the provincial authorities to introduce therein, the concept of limited liability partners and encourage private equity investment through such entities.
The SECP specifying limits for incurrence of capital expenditures and disposal of fixed assets by the board of directors as required under Section 183 of the Companies Act 2017, through amendments to the Companies (General Provisions and Forms) Regulations, 2018.
As a step towards digitisation, the SECP will be undertaking the following steps: Digital financial reporting for companies through Extensible Business Reporting Language (XBRL); automation of departmental processes under the LEAP and Business Process Reengineering; development of an online portal for all the electronic submissions, i.e. AGM notices, financial statements- interim or annual, which are currently being submitted electronically on the designated email addresses and development of online portal or system for reporting of investments out of the Employees Contributory Funds' by companies.
Copyright Business Recorder, 2020
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