Interview with Syed Farhan Karim — Vice President, Capital Market Arif Habib Limited
Syed Farhan Karim carries a proven track record of establishing client relationship, dealing and executing brokerage deals in capital market of Pakistan. He has over twenty years of experience in the fields of research and equity sales. He has been serving Arif Habib Limited since 1997 and currently holds a position of Vice President Capital Market. He holds an MBA (Finance) degree from the International University (Missouri) as well as a Bachelor’s degree in Commerce and Economics. He was awarded as third runner up for the Best Trader of the Industry in the year 2012 at CFA Excellence Award. He is engaged in dealing with mutual funds, banks, DFIs and high net worth individuals in providing thorough analysis of market, portfolio management and recommendations for execution of business in equity capital market of Pakistan.
PAGE: How would you comment on the impact of the recent mini-budget/economic package on the capital market?
Syed Farhan Karim: I see the recent economic package as having a positive impact on volume and interest in the capital market. The government has announced abolition of 0.02 percent advanced tax on brokers and allowed carry forward of capital losses for three years. Other favorable measures for the revival of domestic industries were also announced. This is expected to have a positive impact on the listed companies. Overall, the economic reforms package has had a positive impact on the overall confidence in the stock market.
PAGE: Could you tell us about the recent developments in the primary and secondary markets?
Syed Farhan Karim: Over the past decade, IPOs (Initial Public Offerings), SPOs (Secondary Public Offerings) and SEOs (Secondary Equity Offerings) remained a major source of fund raising and capital formation for companies. Over the past decade, Rs255 billion has been raised from the market, while more importantly, Rs236 billion has been raised during past five years. Major developments in the last year included Initial Public Offerings (IPOs) of At-Tahur Limited (PREMA) and Matco Foods Limited (MFL). We believe that with rising interest rates, companies will be inclined to raise funding from the capital market.
PAGE: What is your take on the foreign investment in the capital market of Pakistan in a couple of years?
Syed Farhan Karim: Foreign flows going forward should witness a surge after recent years’ continuous selling. Entry into an IMF program will be a major factor attracting foreign investment due to improving economic discipline that we can expect after entering into the program. Confidence in the business and economic climate of other multilateral institutions like Asian Development Bank (ADB) and World Bank will also significantly improve thereby impacting foreign investment positively.
PAGE: How do you see the economic growth by the end of this fiscal?
Syed Farhan Karim: We expect economic growth to witness a significant slowdown with GDP growth expected to settle at 3.5 percent for FY19. High interest rates and measures to curtail the overheating of the economy and twin deficits are primarily the reasons for a slowdown in economic activity. However, in a longer run, prospects for our economy are very bright.