Chief Executive Officer (CEO) of Pakistan Stock Exchange (PSX), Farrukh H. Khan said on Tuesday afternoon that a huge amount of funds is 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 reasons 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 said 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 and pressurizing the local Currency that disrupted the exchange. The government could attract local as well as foreign inflows by sales of these bonds. Through borrowing locally by listing debit on PSX, it could also avoid the demand for enhanced sovereign limits,” he remarked.
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.
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 PSX management deserved appreciation for keeping the exchange functional in the difficult situation after COVID-19 outbreak.
