KARACHI: Pakistan Stock Exchange’s recommendation for allowing foreigners to trade in PSX stocks is under consideration and a decision would soon be conveyed to the exchange, Securities and Exchange Commission of Pakistan (SECP) acting chairman Zafar Abdullah said on Thursday.
The SECP chief was addressing the members of PSX Board of Directors during a visit to the stock exchange.
The PSX team was led by Mr Arif Habib, former chairman of the bourse, in the absence of chairman PSX Muneer Kamal who was understood to be in Islamabad.
A source privy to the meeting said liquidity issue in the stock market was also a major point that came up for discussion. The members asked for either allowing the resumption of in-house financing or increase in the number of eligible securities in the Margin Trading System (MTS) — which currently stands at fewer than four dozen.
The SECP chief declined to allow in-house trading. However, he said the bourse should draw up a fresh criterion for including more securities in the MTS which would be considered. MTS is a financing system through the stock market.
The chairman was also informed that banks had scant interest in the other financing product — the Margin Financing System.
Mr Habib underlined various issues which were contributing to the decline of capital market and expressed his confidence that SECP would be able to resolve those issues.
Officiating Managing Director of PSX, Mr You Hang, gave an overview of past and present performance of the exchange and presented various recommendations for market development.
After meeting the Board of Directors of PSX and other market stakeholders, chairman SECP attended a meeting with Trading Right Entitlement Certificate (TREC) Holders at the share market.
Mr Abdullah said that it was the desire of SECP that pre-emptive controls were in place which could avoid the need to impose any penalty.
With regards to non-representation of TREC Holders on the PSX Board, he said that there was a need for a vibrant Brokers’ Association of TREC Holders which could raise all their issues directly with the SECP.
Reappointments on policy board
The Ministry of Finance has reappointed Hafiz Yousaf and Senator Osman Saifullah in the policy board of the SECP for a four-year term.
Mr Yousaf was one of the shortlisted candidates for the slot of Commissioner Securities and Exchange Commission of Pakistan and he was tipped to be next chairman of the SECP as the incumbent chairman Mr Zafar Hijazi is set to retire in the middle of December.
Besides Mr Hijazi is under suspension by the orders of apex court after the JIT accused him of record tampering.
When Ishaq Dar became finance minister he appointed Mr Yousaf in the SECP policy board, later when his tenure expired he was made member of the State Bank’s Board.
However, some appointments may run into complications due to apparent violations of the policy board’s code of conduct.
Mr Saifullah is a senator and no person with political background can be appointed on SECP’s policy board. Besides the Saifullah family has extensive mention in the Panama and Paradise Papers leaks.
The SECP is one of the government agencies that is investigating the details revealed in those leaks.
Published in Dawn, November 24th, 2017
