China-nominated managing director for PSX ‘faces opposition’

Management wants Canadian Richard Morin, some brokers feel appointment would be too expensive

KARACHI: The Pakistan Stock Exchange (PSX) is facing opposition from some brokers and members over China’s nomination of Richard Morin, a Canadian citizen, as the managing director, suggesting early cracks in the relationship that saw a 40% takeover.

The PSX was sold to a Chinese consortium that now holds a 40% stake with 20% offered to the public through an initial public offering with brokerage houses controlling the remaining 40%.

However, the relationship seems to have hit its first real stumbling block with some brokers and members of the PSX opposing China’s nomination of Morin.



While the PSX is yet to formally announce his appointment as the latest MD, officials confirmed that the board of directors has finalised it in principle.

However, a couple brokers, showing their concern over the unofficial appointment, said the Canadian national would unnecessarily cost more to the company - the PSX - as he is being appointed at a huge salary and is also being given special perks, including residential allowance and international traveling expenditures.

Market talk suggests Morin’s monthly salary has been fixed at Rs3 million.

In addition, a broker said that the foreign national would not be aware of “our national culture and particularly, the stock market culture” and this may prove to be a hindrance in his performance.

“The stock market mostly operates on personal repo and relationship and he (Morin) lacks that on both fronts,” a broker told The Express Tribune.

A PSX official, confirming his appointment, however, said they have not received any formal opposition from the brokers. Members have the right to have their personal opinions.

“Only the shareholders of the company (PSX) have the right to accept and reject his appointment and approve and disapprove his monthly package

“They may do this at the forthcoming Annual General Meeting likely to be held at the end of this month or at the beginning of the next month,” he said.

He said Morin is a professional and experienced official. He has served at Canadian stock markets and the Stock Exchange of Mauritius. He has worked at several brokerage houses and asset management companies.

The official added that the PSX has given the right to Chinese shareholders of PSX to nominate candidates for the top three positions of the market i.e. managing director, chief financial officer and chief regulator officer.

However, the full board of directors is still has the power to finalise appointment of candidates. “We have given them (Chinese) the right to nominate candidates after the PSX sold its 40% stake to the Chinese consortium early this year,” he said.



The official said it may take one to two weeks to make the formal announcement of the appointment.

Earlier, Nadeem Naqvi served as the managing director for six years. The PSX board of directors appointed him for the post in April 2011. Following the completion of Naqvi’s tenure, Haroon Askri was made acting managing director in June 2017.

The new managing director’s appointment is being made at a time when the PSX’s benchmark KSE-100 Index is struggling to recover from a steep correction.

Despite a slim recovery to 42,841 points till September 18, the index is still close to 23% lower from its peak of 52,876.46 hit on May 24, 2017.

Last year, it grew 46% and emerged as Asia’s top-performing market and among the top five in the world.

Published in The Express Tribune, September 19^th, 2017.

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