The Karachi Stock Exchange has kicked off the process of attracting foreign investors by holding seminars and road shows.
First of a series of such seminars on "Focus of Karachi Stock Exchange and Economy of Pakistan" held in Islamabad on Thursday.
A large number of diplomats and representatives from all three bourses were present to hear the KSE success story narrated by the KSE Managing Director Moin M. Fudda, and KSE Chairman Arif Habib.
On the occasion a message was read by Additional Secretary Ismael Querashi on behalf of Finance Minister Shaukat Aziz who said that the continuation of robust macro economic policies, privatisation of public sector companies, disinvestment of public sector companies through the capital market and marked improvement in Indo-Pak relationship have resulted in a vibrant capital market.
Moreover, the stock exchanges have shown vision by wholeheartedly accepting and successfully implementing these reforms and today the Pakistani capital market is ranked as one of the best performing market in the world.
His message said that the stock markets undoubtedly play a vital role in the economic development of a country by bringing together those who have surplus funds and others who can put those funds to use. As a result, the capital market has a crucial function in mobilising domestic resources and channelling national savings into the productive sectors of the economy.
The level of capital market development is thus an important determinant of a country's level of savings, efficiency of investment, and ultimately of its rate of economic growth. An efficient capital market can also provide a wide range of attractive opportunities for both the domestics and foreign investors.
Over recent years, the Pakistani capital market has witnessed phenomenal growth as illustrated in the spectacular performance of the KSE 100 Index.
In this regard, the KSE 100-share Index that stood at 2667 points nearly a year ago, on January 2003, has crossed 5400 points, depicting a growth of more than 100 percent while the market capitalisation has improved from Rs 595 billion to Rs 1.4 trillion, depicting a growth of 141 percent. The local bourses have an important role to play as a catalyst in capital formation.
He opined that the public offer of the shares of state-owned firms like the OGDCL, NBP and SSGC have deepened the stock market and offered new investment opportunities to investors.
The overwhelming public response to the OGDCL and SSG issue is an indication of much improved investor confidence in our markets.
Further, greater institutional activity as well as listings of new active companies such as OGDC, M/s World Call Broad Band and, TRG Pakistan Ltd and Pakistan International Containers Ltd has increased the liquidity in the market.
During the first 4 months of the current year the new listings at the Exchange stands at Rs 44.8 billion.
Qureshi said that Pakistan is an emerging market rich with exciting opportunities for investment.
Given the current economic scenario in which the basic infrastructure for a vibrant capital market is present, it seems to me to be a good time for companies to tap capital from the stock exchanges.
The economy is at the take-off stage and going forward. All macro-economic indicators are improving, geo-politically we are in a most advantageous position, we are internationally acceptable and receiving a lot of economic assistance, the regulatory framework of the capital market is of international standards, we have an independent professional regulator, and the capital market is offering phenomenal values.
Further, the improved stability in bilateral relations between Pakistan and India has increased investor confidence in the market.
The persistent efforts of the government have started to pay rich dividends and the economy has shown visible signs of a turnaround.
As a result, Pakistan's economy is poised for a higher and sustainable growth, which will help achieve the main objectives of reducing poverty and creating more job opportunities.
It is expected that the real GDP growth target of 5.3 percent will be surpassed by a fair margin and is expected to be in the range of 5.5 - 6.0 percent.
The prevailing positive economic indicators including expectation of GDP growth, is a major factor contributing to the positive market sentiment we have been witnessing over recent months.