Chairman Lahore Stock Exchange (LSE) Syed Asim Zafar has said that negative perception about the stock exchanges would continue to prevail till demutualisation of bourses and integration of the trading floor takes place.
Talking to newsmen here Tuesday, Asim said: "we are in favour of national stock exchange and wants merger of all the three exchanges in the country. Proposal in this connection was submitted to the Securities and Exchange Commission of Pakistan (SECP) which did not agree on the plea that it wants competition among the exchanges."
To a question, he said that LSE Board has already submitted its views to the SECP on the issue of non-member director. The 'corporate democracy' has to work in the stock exchanges, he said and added that he has proposed to the SECP to reduce non-member directors' strength from four to three to make it feasible.
Talking about the economy and capital market, Asim said the country is likely to maintain GDP at 8 percent ratio but as economy grows fast, it leaves negative impact like inflation. The government has cut the money supply and enhanced mark up rate.
About the LSE, he said that its average turnover has increased to 70 million shares, while its cap stands at Rs 1.5 trillion while 80 percent trading is done through internet out of the LSE premises. Following successful results of trading flour at Sialkot and Faisalabad, we have decided to set up another trading flour in Multan for which preliminary work has already been made. Moreover, building design of second tower of the LSE building is under process and as soon as it is wet, construction work would start, he maintained.
He said that sector wise index has been developed for future trading which would provide direct access to the financial institutions. Besides, it would help specialised brokers as well as investors in trading.
Asim said that LSE took lead in demutualisation and submitted Memorandum of Article of Association, structure rules and board structure. 'We have completed almost 95 percent work on our part and SECP has to respond in this regard. In order to improve risk management, we have also prepared value at risk model in collaboration with the National Commodity Exchange. This system has been displayed at the LSE, which started its function parallel to the previous system. We would analyse both the systems to check the results and new system would be fully implemented within next 15-20 days', he added.
Managing Director LSE Hamid M. Imtiazi told newsmen about steps taken for human resource development. Transparency and efficient market is a must to intact the investors' confidence in the stocks business.