Dr Tariq Hassan, Chairman, Securities and Exchange Commission of Pakistan (SECP), has said that 'Voluntary Pension System' plan has been forwarded to Ministry of Finance for approval to encourage development of private schemes and boost activity in the financial sector.
In his final remarks in a daylong seminar on 'KSE index 100, Current Scenario and Future', he appreciated the role of all stakeholders and also applauded the participants who patiently heard the speeches.
Sher Afgan Malik, President, Institute of Cost and Management Accountants of Pakistan, Arif Habib, Chairman, KSE, Aliduddin Ansari, CEO AKD Securities, Shabbir Hamza Khandwala, CEO KASB Securities, Tariq Iqbal Khan, Chairman NIT, and Nasim Baig, chief executive Arif Habib Investments Management were key speakers at the seminar.
Dr Tariq said that SECP is planning to set up 'Corporate Development Index', which would include company's performance. It will also have companies' pay dividend and non-pay dividend, their social responsibilities etc.
He said that besides investors' education, "we should also plan to educate" the regulators on the ever-increasing information emerging from all regional and developed markets.
"Though the market has developed during last couple of years, there is lot of scepticism and apprehension related to brokers, regulators and stock market players. We have mitigated the risk but not eliminated," he said.
Responding to questions he said that Privatisation Commission is doing an excellent job and steadily bringing the state-owned companies on the country's stock exchanges. "Any state could not sold 100 percent shares of the company through stock market because it needs some strategic investors to run the entity," he said.
About COT issue he said that SECP has no plan to reduce the number of companies or increase from eligible 30 scrips. He said margin financing would soon be introduced which would run parallel to COT till such time as margin financing is fully accepted by all stakeholders.
"Developing the market is our philosophy, and we would take all necessary steps to make the avenue a safe haven where investors could park their funds without any obstacles," Hassan said.
"The SECP has hired professionals from Australia, Singapore and Hong Kong to help us demutualize the stock market and also help set up a National Stock Exchange," he added .
Arif Habib, Chairman, KSE, said that "our stock exchange has now been rated fifth best stock market", which was not possible because of the inherent changes made and without support of the SECP. The index has crossed 5000 points because of robust economic policies, improving relationship with India and assurance to the people that they would resolve all their difference through dialogue, healthy corporate results, privatisation process, especially the listing of OGDC and additional shares of SSGC. Both received overwhelming response which showed that the confidence of general investors has inclined towards the stock market.
He said that as much as 20 companies are eligible for derivatives.
The vision for the future is setting up an OTC market, national clearing and settlement system. Brokers are encouraged to set up branches, agents and telecom/internet hook-ups and develop mutual fund and pension fund industry to give the market international underpinning.
Hamza Khandwala said that divestment by the government through public offerings allows investors to enjoy handsome gains while allowing the government to fulfil its aim of privatising government owned corporate entities.
He said that due decline in returns on fixed income securities and lack of other money deployment opportunities forced retail investors to the stock market and created a new class of investors in Pakistan not witnessed before.
Mutual Fund industry is playing a vital role in the stock markets contributing significantly in Pakistan's economy, Tariq Iqbal said.
He said that Mutual Funds also play an important role for small investors who do not possess the necessary skills to operate directly in the market and all these investors can benefit from economies of scale as well as expertise available in the shape of experienced, qualified and professionally competent managers.
He said the corporate earnings and payouts are showing appreciable year-on-year growth for the second consecutive year, and for the first time, perhaps, the equity markets are providing superior returns as compared to all other alternatives, even on risk adjusted basis.
Iqbal said that National Investment Trust (NIT) is not only the oldest and largest mutual fund in the country but is also the largest single investor on the Karachi Stock Exchange.
He said that "we have a portfolio of over 500 companies" in almost every sector.
The entire investment portfolio of the Fund has been evaluated with respect to the future prospects of investor companies, and provisions have been recorded against permanent impairment in the value of investment portfolio, where required, he added.
NIT is the single largest investor in the Corporate Sector in Pakistan and its nominees represent NIT on the Board of Directors of over 250 listed companies. Following the implementation of the Code of Corporate Governance, NIT has further increased its efforts to pursue the introduction of good governance at all investor companies.
He said the mutual fund industry has finally started to develop to a reasonable level but there is still a long way to go.
Aliuddin Ansari, Sher Afgan Malik, Nasim Baig and Badaruddin Fakhri also spoke on the occasion.
APP ADDS: The National Stock Exchange is likely to come on ground within this year.
This was stated by the Chairman of the Securities and Exchange Commission of Pakistan (SECP), Dr Tariq Hassan, while talking to APP here on Saturday.
"We have given the experts' committee four months' time, who has started its work on February 18th," he informed.
The SECP chief said after the receipt of recommendations of the committee, the stakeholders would be consulted and then the final proposals would be implemented.
The whole idea is that the 'closed club' is opened up to other investors as well and they can take part in the exchange, the SECP chairman said.
Tariq Hassan said then the capital required for investment in the IT could be raised, which plays a very important role in the electronic trading and towards the development of the stock market not only in the national stock market but also in regional stock markets.
He further informed that the policy-board of the organisation has approved the concept of Institute of Corporate Governance.
The SECP chief said a meeting would be arranged with the potential stakeholders some of whom have been identified, in order to determine the form of the organisation as well as its management structure.
Tariq Hassan pointed out that this project too would come on ground by the end of this year.
SECP chairman said that even the non-listed public and private companies would also be educated and the directors would be trained to play their full role under the corporate law.