KARACHI: Federal Finance Minister Muhammad Aurangzeb Friday said Pakistan’s delegation led by him will leave for Washington on April 14, 2024 to discuss new programme with International Monetary Fund (IMF) and expressed the hope that Pakistan will reach a Staff- Level Agreement (SLA) with the global lender before the end of June 2024.
Speaking at gong ceremony at Pakistan Stock Exchange and later talking to reporters, the Finance Minister said that the government wants to seek larger and longer bailout package from the IMF, however he said the size of the next IMF programme has not been decided yet.
He said that with significant improvements in key economic indicators the economy in year 2024 commenced on a better note.
Aurangzeb unveils his approach to IMF lending
The minister said that the Ministry of Finance, in collaboration with the Ministry of Law and Federal Board of Revenue (FBR), was working to eliminate leakages in tax revenue and bring more people into the tax net.
He maintained that government was working to bring reforms in the state-owned enterprise (SOEs), privatization and energy sectors besides improving tax system. He highlighted the role of the private sector in economic development.
The Finance Minister acknowledged the importance of the capital market in advancing economic growth adding that the government would work with Securities and Exchange Commission of Pakistan (SECP) to create a conducive regulatory environment for economic growth in the capital market.
He said the government would focus more on improving the efficiency, transparency, and protection of investors in the capital market to enhance its performance. The finance ministry would collaborate with the capital market to facilitate access to capital for small and medium-sized businesses.
The Finance Minister expressed gratitude for Chinese participation and investment in Pakistan’s capital market and stock holdings and emphasized that the growing cooperation between PSX and Chinese exchanges was vital for the economic development of Pakistan and mutual benefits for both countries.
While outlining the government’s commitment to creating a more efficient, transparent and investor-friendly capital market that benefits all Pakistanis, the finance minister said that the government is keen to focus further with the capital market to enhance market efficiency, transparency and investor protection. The Ministry of Finance would like to work with the capital market to outline strategies to promote capital formation, encourage listings, and facilitate access to capital for businesses, particularly small and medium enterprises, he added.
Highlighting the government’s openness to international collaboration, specifically mentioning China as a key partner, he said, “We are actively exploring potential partnerships with international players, and China, a key economic partner, presents exciting opportunities. The Ministry of Finance is open to discuss avenues for collaboration with Chinese financial institutions and market participants to promote cross-border investment and knowledge exchange. This collaboration can contribute significantly to the development of Pakistan’s capital market and benefit both economies”.
You Hang, PSX Board Member, on behalf of Pakistan Stock Exchange, welcoming the Federal Finance Minister on his visit to PSX said the Chinese Investor Consortium wants to work in close cooperation with local partners and shareholders, market participants and regulators to make PSX a model of successful foreign direct investment in Pakistan, which is a win-win outcome for foreign investors, local shareholders and capital market participants. “In this regard, we look towards the Government of Pakistan and your leadership to support our efforts and provide us the opportunity to actualize our joint vision of making the capital market a real engine of corporate growth and a viable vehicle for investors to deploy their capital”, he added.
Speaking at the occasion, Farrukh Khan, MD and CEO PSX, said it is an honour to have the newly incumbent Federal Finance Minister visit PSX. He warmly welcomed Muhammad Aurangzeb on his first visit to the Exchange after assuming office and said his visit to PSX so soon after taking charge as FM is a testament to the government’s recognition of the important role the capital markets play in economic growth and documentation of the economy.
“We understand the difficult economic decisions that will need to be taken by your government and assure you of our full support in achieving the government’s economic program and putting Pakistan on a sustainable path to progress”, he said and added that the market fully supports the difficult decisions that must be taken and in response the stock market is trading at record levels.
He said the Stock Exchange can contribute to the economic progress of the country and attract foreign investors if a level playing field and consistent tax and economic policies are put in place by the government. “We also look forward to working with you on the privatisations and share sales that are planned”, he said adding that executing them through the stock market will bring the needed transparency, help in price discovery and grow the stock market. “To achieve this, it is critical that we all work together to improve Brand Pakistan and increase the size of our market on a war footing.”
Dr. Shamshad Akhtar, Chairperson PSX, thanked the Federal Finance Minister for his visit and congratulated the Finance Minister on assuming his office and look forward to working with him for further development of the capital market.
She said Pakistan Stock Exchange has a strategic role in the entire capital market ecosystem of Pakistan. The current board of PSX has led the way to strengthen the governance, regulatory framework, and leading the technical transformation to unleash the immense potential and power of this platform, she added.
She said the importance of collaboration between PSX and the Ministry of Finance cannot be emphasized enough for fostering a conducive environment for capital market growth. “We need a very strong interdependence and linkages between the banking sector and the capital market to lift the capital market”, she said adding that the power of any exchange lies in the diversification of capital generation.
To meet private sector requirements, PSX facilitates IPOs, equity and different debt structures which help diversify the products offered by the banks, she said.
“Our vision and mission of the PSX board is to strive for the development of a Sustainable Stock Exchange”, she said.
Last year, PSX has joined the league of Sustainable Stock Exchanges and engaged the stakeholders to conform to ESG standards. This is an important aspect that the Finance Ministry can showcase internationally to generate interest from foreign and institutional investors and drive foreign exchange inflows into the country.
She said that PSX board has been very strategic and has attempted to strategize and prioritise the development of the Exchange. PSX in the last six months has simplified its IPO processes and is now fast-tracking its approval. New initiatives are being launched to stimulate supply and demand for PSX business and products. Regulatory reforms are also critical and we have undertaken those as well.
“We have been able to foster an environment where investors can operate with confidence and trust. Joint supervision and inspections of PSX with other subsidiaries of the capital market are a breakthrough”, she said.
“Strong vigilance of regulatory committee which I have been heading and enforcement measures thereof have instilled integrity in the market practices that have promoted a fair and ethical environment”, she added.
The event presented the opportunity to the Federal Minister to meet with the top management of PSX, SECP, key stakeholders, market participants and business leaders. Matters impacting the capital markets, business, the current economic scenario and challenges thereof were discussed amongst the participants of the event.
Copyright Business Recorder, 2024
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