Chinese investors have shown interest in investing some $ 2 billion in Pakistan Stock Exchange (PSX).
Addressing a press conference on Friday, PSX Chairman Sulaiman S Mehdi said that Chinese brokers have an asset management fund of some $ 52 billion including some $ 10-12 billion of stock fund. "As Pakistan's stock market is currently cheaper than other competitive equity markets and offering a dividend yield of over 6 percent, Chinese brokers, during a meeting last week in China, expressed interest in investing $ 2 billion in different shares at PSX," he added.
However, Chinese investors are required to get some regulatory approvals from their regulators to invest this amount in Pakistan's equity market, he said and added that Pakistan's government should closely work on this proposal to mature the proposed Chinese investment.
He said PSX is also planning to launch an Exchange Traded Fund (ETF) by January next year to provide investment opportunities to local small investors. It will be a listed fund and will be initiated with 10-12 companies.
The PSX chairman said following the decision and approval of the board, PSX has signed a contract with Shenzhen Stock Exchange (SZSE) for the acquisition of $2.85 million trading and surveillance systems to bring PSX at par with other international stock exchanges.
The formal signing ceremony took place in Shenzhen, China, earlier this week. The PSX delegation was headed by the PSX Chairman Sulaiman S Mehdi and the Chinese side was represented by the Chief Executive Officer of Shenzhen Stock Exchange, Wang Jianjun.
He said the trading and surveillance system offered by SZSE is a state-of-the-art, robust system. The additional benefits of the SZSE trading system would be built-in risk management, market access, market data dissemination, market control, real-time trading system, disaster Recovery & System operation, monitoring and management, growth enterprise market (so far known as Small and Medium Enterprise trading), bonds/term finance certificate trading, single stock option trading, index option trading and real time fault-tolerant system.
"Another additional interface is 'China Connect' which can give PSX access to other exchanges that SZSE is connected to, ie, Shanghai and Hong Kong, etc. This would open up the Asian market to PSX and Pakistan for business opportunities. Additionally, the improved data quality will compound PSX data vending potential and capability immensely," he added.
Mehdi said the surveillance system consists of features such as real-time monitoring, ex-post investigation, trade replay, data query and reporting, case management, surveillance task management, security and audit, and job schedule system. These features are world class stock market surveillance tools and PSX stakeholders of the capital market will be direct beneficiaries.
In today's fast-changing technological world, a reliable, secure and efficient trading system is a basic requirement for PSX. Further, a robust and state-of-the art surveillance system, is also an essential as PSX is the only national exchange and the frontline regulator, he maintained.
"We have received immense support and applause from the capital market stakeholders, the brokerage industry as well as the listed corporate as they all stand to benefit from the efficient operations, new product possibilities and surveillance capabilities that this system will bring in" he said.
Chairman PSX said that the bourse is confident about the quality of the system which is currently used by the Shenzhen Stock Exchange itself without any lapses. SZSE is the world's 3rd largest exchange in terms of trading value which shows the robustness of the trading & surveillance system.
SZSE has assured continuous technical support to PSX as a strategic partner post-installation of this system. Both PSX and SZSE reaffirmed their commitments to technological cooperation which would be helpful in elevating the image and standing of PSX vis-à-vis other developed exchanges around the world, he said.
PSX directors Abid Ali Habib, Ahmed Chinoy, acting CEO PSX Muhammad Rafique Umer and CFO Ahmed Mitha were also present.