KARACHI: Pakistan Stock Exchange is 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, says PSX Chief Executive Officer.
PSX-CEO, Farrukh H. Khan, during an interactive session with economic reporters at Karachi Press Club on Tuesday, 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 said.
He said 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 ; pressurizing the local currency that disrupted the exchange. The government could attract local as well as foreign inflows by sale of these bonds/sukuks. Through borrowing locally by listing debit on PSX, it could also avoid the demand for enhanced sovereign limits.
He suggested that the government could issue Municipal Bonds as well to raise funds.
PSX-CEO was of the view that huge amount of funds were needed to develop ports, timely execution of CPEC projects, to develop tourism and hospitality industry, and to finance climate change actions.
He 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 reason for small capital market of the country.
He sought media support to create awareness among the small investors about the benefits of investing in the capital market.
Farrukh H. Khan said that over last five years companies raised Rs 45.9 billion by listing on PSX and raised Rs 224.1 billion through Right issue.
He said the exchange had 531 listed companies, two of these were listed on GEM Board. There were 249 shariah compliant listed companies. And, he said, the market capitalization figured Rs 7.87 trillion, with over 269, 000 investors and 204 active brokers. PSX had 13 indices and 6 extended trading funds (ETFs), 29 corporate debt securities currently listed and 12 market makers for debt securities.
He said the exchange had investors from the world over and after introduction of Roshan Digital Account the Overseas Pakistanis were an addition.
He said 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 said PSX management deserved appreciation for keeping the exchange functional during difficult situation emerged after COVID-19 outbreak.
PSX-CEO unveiled that when the current political chaos and economic pressures would be over , many companies were expected to get listed on the stock exchange.
He also replied many queries of the journalists.