IN an interview, Chief Executive of Pakistan Stock Exchange (PSX) Farrukh H Khan said that the PSX is all set to make a newly acquired trading platform which has been acquired from Shenzhen Stock Exchange (SZSE) fully operational this month, which indeed will make trading more transparent and attractive, bringing the stock on par with international stock exchanges.
It is a matter of satisfaction that both Pakistan and China are growing their cooperation in diverse fields.
Provision of trading and surveillance system to PSX is yet another classic example of how China is helping Pakistan to move forward on the path of technology to improve overall investment climate.
The new system will significantly enhance PSX’s capability in terms of safe operation, risk prevention and control, to make it more reliable, cost-effective and efficient. SZSE also holds forty percent stocks in PSX, which certainly is also a source of strength for our bourse.
Most recently, Morgan Stanley Capital International (MSCI) downgraded Pakistan indexes from Emerging Market Index (EMI) to Frontier Markets Index (FMI). Back In 2017, the benchmark KSE-100 had surpassed the 53,000-point mark with market capitalisation worth $100 billion.
However, market capitalisation has dropped over the years to $45 billion including a 17% decline in the last four months.
There may be several reasons for it especially the current situation in Afghanistan as well as our own economic woes including rising prices yet this reclassification of index has only further created negative impacts in the equity market.
Needful should be done to restore the confidence of foreign investors on the PSX. We also need to learn lesson from the Chinese bourse.
Established in 1990, the SZSE has now become the financing cradle of more than 2,100 companies with a total market value of 21.67 trillion Yuan. It also has a technology team of about 1,000 people and had independently developed key technologies of trading, surveillance, information disclosure and financial cloud.
We, therefore, will encourage those sitting in the PSX to further strengthen connections with SZSE and learn from its good experiences to introduce new products and to make our stock market more productive and strong.