Caretaker Federal Minister of Finance, Dr Shamshad Akhtar, has proposed the listing of government debt securities on the Pakistan Stock Exchange (PSX) as a means to foster the credit market’s growth. During the inauguration of the Central Gateway Portal (CGP), the caretaker finance minister, emphasised the pivotal role that the securities market could play in developing the country’s debt market through this initiative.
Akhtar explained that listing government debt securities on PSX would not only facilitate retail participation but also enhance transparency in the process of issuing securities through public auctions. She underscored that this move would be instrumental in promoting the loan market in Pakistan. She urged regulatory bodies like Securities and Exchange Commission of Pakistan (SECP), PSX, and other stakeholders to collaborate closely for the effective implementation of these reforms.
Highlighting the challenge of low liquidity in capital markets due to a limited number of direct investors, the minister expressed confidence in the potential of the centralised gateway portal to expand the investor base significantly. She commended the opportunities it offered to investors and its streamlining effect on customer on-boarding processes.
However, she emphasised that the successful launch of the CGP should mark the beginning rather than the end of the project. She urged PSX, brokers, insurance companies, and asset management companies to focus on marketing efforts and attract new investors to the capital market. She stressed the need for coordinated efforts from all Capital Market Infrastructure Institutions (CMIs) and market intermediaries, particularly brokerage houses, under the guidance of the SECP.
The finance minister also suggested efforts to increase the number of Initial Public Offerings (IPOs) on PSX to enhance market liquidity. She called for a proactive approach in creating awareness, streamlining the listing process, and ensuring an IPO pipeline.
The caretaker finance minister urged the SECP and capital market institutions to collectively review investment costs, ensuring that maintaining an account is not so expensive as to discourage small investors. She emphasised the importance of aligning digitalisation with international trends and promoting competition among online brokers.
The ceremony also saw the formal inauguration of the CGP, a unique financial initiative aimed at engaging investors and consumers in the securities market, non-banking financial company (NBFC) sector, and insurance industry. SECP Chairman Akif Saeed and CDC (Central Depository Company) Chief Executive Officer Badiuddin Akbar also addressed the inauguration ceremony.
Published in The Express Tribune, September 23rd, 2023.
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