PSX’s poor showing worries govt

Finance minister Dar vows to revive bourse as one of best performers in region

ISLAMABAD:

 

Finance Minister Ishaq Dar on Sunday voiced his concern over the poor showing by the Pakistan Stock Exchange (PSX), which had once held the distinction of being one of the top-performing bourses in the region.

During a meeting with a joint delegation of the PSX and Mutual Funds Association of Pakistan (MFAP), which called on Dar at the Federal Bureau of Revenue (FBR) headquarters in Islamabad, the minister assured the visitors that their concerns about the lack of investors would be addressed in the upcoming budget.

He also promised the delegation that steps would be taken to encourage investment in the country.

The PSX was represented by its managing director and CEO Farrukh Hussain and Chief Financial Officer Ahmed Ali. Mir Adil and Arif Qadri represented the MFAP.

The finance minister was accompanied by Minister of State for Finance Dr Aisha Ghaus Pasha, Special Assistant to the Prime Minister (SAPM) on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, Reforms and Resource Mobilisation Commission (RRMC) Chairman Ashfaq Tola, FBR Chairman Asim Ahmad and other senior officers from the finance ministry and Revenue Division.

State Bank of Pakistan (SBP) Governor Jameel Ahmad also attended the huddle.
During the meeting, representatives of the MFAP highlighted the growth of Shariah-compliant mutual funds. They proposed that short-term Shariah-compliant sukuk should be launched.

The MFAP representatives suggested certain measures to be taken in the upcoming budget to promote mutual funds. The representatives of the PSX shed light on the erosion of market capitalisation during the last six years.

They said the stock market was a highly documented segment and major contributor to the national exchequer. They also gave certain proposals to encourage people to invest in the stock market.

Dar hoped that the PSX would reverse the trend and once again become one of the top performing stock markets in the region.

The PSX’s KSE-100 – a benchmark for market performance – was Asia’s top-performing index in 2016, much to the delight of the thousands of investors, who thought the golden run would continue.

After close to 45% return in dollar terms for the average investor in the previous year, fresh money poured in.

However, the year 2017 proved to be a nightmare. Equity-based funds posted negative returns in the range of 10% to 20%, while brokerage houses had to be content with low volumes that put a dent on their earnings.

Overall, the KSE-100 Index posted an absolute negative return of 15.34% during the year. In dollar terms, it was a negative return of 20%.