Business community hails the re-opening of equity markets for normal trading

  • February 23, 2009
Mian Shaukat Masud, President, Islamabad Chamber of Commerce & Industry on behalf of business community welcomed the directive of Security and Exchange Commission of Pakistan to re-open the three stock exchanges of the country including Islamabad Stock Exchange for normal trading by removing floor from December 15 with normal trading parameters and termed it a positive step for businessmen and investors. He said this decision will rebuild investors’ confidence, both domestic and foreign. He said the investors were eagerly awaiting the removal of the floor scheduled for Dec: 15, 2008 and now they will take a sigh of relief on the re-opening of equity markets for normal trading. He said Pakistan needs vibrant and flourishing stock market as it is seen as a means for increased domestic resources mobilization, enhancing the supply of long term financing and encouraging the efficient use of existing assets. He said the proper growth of stock markets will lead to a lower cost of equity capital and thereby stimulate investment and growth.

ICCI President said MSCI Barra, a leading provider of investment decision support tools world-wide, including indices and portfolio risk and performance analytics, had announced on Dec: 3, 08 that it will remove the MSCI Pakistan Index from the MSCI Emerging Markets Index as of the close of December 31, 2008 due to the deterioration of investability conditions in the Pakistani equity market since the imposition of the "floor rule" at the end of August 2008, which had resulted in the practical shutdown of the Pakistani equity market and added that the re-opening of our equity market will prove helpful in changing MSCI decision in favor of the country while it will also produce good results for our economy and for the investors.

Mian Shaukat Masud said our stock markets have grown tremendously in recent times which show their resilience and scope of further growth. He said by creating more conducive business environment, Pakistan has the potential to become a hub of commercial and economic activities in the region and thus attract more portfolio investment in the country which the country badly needs to cope with many economic challenges like rising inflation, hike in trade & fiscal deficits, depreciating exchange rate & depleting foreign exchange reserves etc. and added that increasing investment will enable Pakistan to overcome these challenges in a better way. He also stressed upon the government to improve law and order situation in the country and create better business conditions for stock markets so that their smooth functioning could facilitate the provision of new long term capital inflows, diversification of risk, efficient allocation of resources as well as attract the right type of portfolio capital from abroad.