'Bourse provides avenue for free capital flow'

PSX Lahore Regional Head Sarmad Hussain says stock market gave 20% return on investment from 2006 to 2018

Imran Rana April 05, 2019

FAISALABAD: A free flow of capital is imperative for business expansion and the stock exchange can play a crucial role in this regard, said Pakistan Stock Exchange (PSX) Lahore Regional Head Sarmad Hussain.

In a meeting with businessmen on Thursday, Hussain pointed out that the rate of return on investments made through the PSX stood around 20% from 2006 to 2018.

Despite the positive element, he noted, some investors suffered losses solely due to incompetency of their brokers and lack of transparency in their dealings. A vast chunk of such investors comprised those belonging to small and medium enterprises (SMEs), he said.

“The stock market regularly organises awareness sessions, but despite this, new investors seem to be unwilling to invest in the capital market while their capital remains dormant and unproductive,” the regional head regretted.

“Awareness sessions can minimise apprehensions about the stock exchange to some extent, however, these cannot address genuine grievances.”

Saying that every society consisted of negative and positive elements, Hussain suggested that all investors should take necessary protective measures to save their hard-earned investment.

The PSX official proposed that investors must verify the credibility of brokers prior to making investment and also scrutinise the balance sheet of the companies concerned. Moreover, payments should be made through cross cheques to avoid any kind of fraud or cheating.

Responding to a question, he pointed out that the stock market stood at 52,000 points last year, which “has now dived to 38,000 points”.

He said the stock exchange had 230 brokers who were licensed from the Securities and Exchange Commission of Pakistan (SECP) and new investors should only deal with these brokers.

Speaking on the occasion, Darson Securities CEO Dil Awaiz suggested that SMEs, which intended to enter the capital market, must verify the credibility of their brokers in order to minimise the chances of losses.

Faisalabad Chamber of Commerce and Industry President Syed Zia Alumdar Hussain revealed that only 0.237 million out of 210 million people in Pakistan invested through the stock exchange.

Published in The Express Tribune, April 5th, 2019.

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