In the recent bull-run, in which the Karachi share market jumped by more than 58 percent in a short period of 11 weeks, it was important to know investors category who were buying aggressively at the bourses, analyst said.
Investors, analysts and other market players normally make guesses regarding who is actually buying shares taking the Karachi share market among top performing markets of 2009. The identity of buying and selling groups are normally known to all in most of the emerging markets of the world, a leading analyst Mohammed Sohail said.
He said that in this information technology age, capital market regulators around the world have been releasing a lot of information for the sake of transparency and rational decision making. An example is the central bank of Pakistan.
"Under the leadership of former SBP governor, Dr Ishrat Hussain, as a part of banking reforms, the central banks website became a source of tons of information made available to the public on timely manner", he observed. Such statistics regarding the Pakistani banking sector was either not there or were available with a time lag in 1990s, he added.
According to him, in India the exchanges had been releasing data on buying and selling by local and foreign institutions on daily basis for past many years. They have been providing the buying and selling by NRI (non-resident Indians) along with the information on proprietary trading. "This gives the trend and view of various segments of investors and put on rest the market speculation as to who is buying and who is not buying" he said.
In Pakistan right now the National Clearing Company of Pakistan Limited (NCCPL), providing clearing and settlement services to local exchanges, has recently started releasing numbers regarding foreigner portfolio investment. He suggested that with UNI system now in place, NCCPL can release a lot of information as is done in other markets. For instance, NCCPL can release the buying and selling by individual investors and local institutions like mutual funds, etc, along with number of UIN active in a particular day, he recommended.
This data would also put on rest the controversy that local mutual funds are sitting on cash and are not buying. Moreover, the number of active UINI will show the concentration and actual depth of the market which is still a problem with local equity markets, he added.