Huge funds needed to develop ports, timely execution of CPEC projects: PSX chief

Gwadar Pro

Karachi: Pakistan Stock Exchange (PSX) Chief Executive Officer (CEO) Farrukh H. Khan has said that huge amount of funds were needed to develop ports, timely execution of the China-Pakistan Economic Corridor (CPEC) projects, boost tourism and hospitality industry, and finance climate change actions.

Speaking to journalists here, Khan emphasized the need for promotion of small investors, which were the backbone of capital market.

“For this purpose, saving-income ratio would have to be increased. The low saving ratio was one of the reason for small capital market of the country,” he added.

Khan stressed the need to take advantage of the CPEC development in the country and earn money to invest in the CPEC projects.

He opined that the Pakistan Stock Exchange was the best option to the government for raising funds for infrastructure development projects, especially the mega ones, by issuing bonds or sukuks listed on the stock exchange.

The PSX-CEO listed the benefits of debt financing through the exchange which included diversity, efficiency and transparency. “Through PSX, debt could be raised from local investors ; with accessibility to foreign investors. Instead of exclusively depending on borrowing from banks, the government could easily raise funds through PSX at competitive rates. Hence, the funds could be released quickly,” he added.

He maintained that the PSX platform could help the government become self-sufficient and reduce the burden on the country. “Paying back to foreign institutions did result in outflow from reserves; pressurizing the local Currency that disrupted the exchange. The government could attract local as well as foreign inflows by sale of these bonds. Through borrowing locally by listing debit on PSX, it could also avoid the demand for enhanced sovereign limits,” he remarked.

He suggested that the government could issue Municipal Bonds as well to raise funds. He sought media support to create awareness among the small investors about the benefits of investing in the capital market.

Khan informed that over last five years companies raised Pakistani Rs 45.9 billion by listing on PSX and raised Rs 224.1 billion through Right issue.

He noted that the Exchange had 531 listed companies and two of these were listed on Growth Enterprise Market (GEM) Board. “There were 249 shariah (Islamic rules) compliant listed companies,” he pointed out. Khan mentioned that the market capitalization figured Rs 7.87 trillion, with over 269,000 investors and 204 active brokers.

He said the exchange had investors from the world over and after introduction of Roshan Digital Account the Overseas Pakistanis were an addition.

Khan observed that the government should push its companies to get listed on PSX to strengthen the capital market. He urged that the role of the exchange in the economy be highlighted and recognized. “Stock exchange can play a big role in economy,” he asserted.

He contended that the PSX management deserved appreciation for keeping the exchange functional during difficult situation emerged after COVID-19 outbreak.