Lahore Stock Exchange Managing Director Aftab Ahmad Chaudhry said in a speech during a luncheon reception on Monday honouring the Lahore Economic Journalists Association that Pakistani stock markets are generating profits more than any other stock market of the world thus proving attractive for the investors from around the globe. The Securities and Exchange Commission of Pakistan has made buying and selling of shares very transparent abolishing sale and purchase of fake shares, short selling and in-house badla system, he added.
He further said that LSE has started various programmes to protect investors and promote investment in the stocks. At present 431 companies are registered with LSE while eight initial public offerings were arranged during 2014-15 which benefited small investors a lot, he mentioned. He claimed that the stock market in Pakistan gave returns to its investors more than any other regional stock market. Activity was seen in cement, automobile, electronics, foods and various other sectors.
In response to a question, Managing Director Chaudhry said the Moody's International Credit Rating Agency had improved the credit rating of Pakistan because of the economic policies of the sitting government which enhanced the confidence of the international financial institutions on Pakistan which also improved the stock markets. He said the index of the Karachi Stock Exchange has crossed 35,000 points while last year it was around 32,000.
He said inflation was lowest in Pakistan as compared to its neighbours, foreign exchange reserves crossed the $17 billion mark and foreign investment is also increasing. He said the Pak-China Economic Corridor would also bring foreign investment in Pakistan which would strengthen the local industries and economy thus leading more improved performance in the stock markets.
He also urged companies to sell their share through the stock exchange as it was performing better than the banks, saying the Karachi Stock market is the leading performer in the emerging markets and future is brighter. He too urged investors to thoroughly check brokers' details before opening their account and invest on solid grounds instead of rumours.
Quoting Jim O'Neill, he said, "The Pakistan gross domestic product is expected to increase from $375 billion to $500 billion by 2020 whereas Pakistan can become world's 18th largest economy by 2050 with a GDP of $3.33 trillion as Pakistan economy would grow 15 times in the next 35 years."
About the market statistics, he said the market capitalisation stood at Rs 7696.67 billion on July 30. About the top performers, he said the software computer services posted the highest cumulative stock return at 250 percent in 2014-15 against only two percent in 2013-14 followed by automobiles 93 percent, electricity 63 percent, life insurance 62 percent, media 48 percent and cement 45 percent. He further said that net foreign portfolio investment stood at US $47 million in 2014-15 against a meager $1 million in last financial year while Pakistani equities have delivered 26 percent a year to US investors since 2009. He also urged investors to verify the legitimacy of the investment and assess the risk-return profile of the investment while investing in stock market.
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