INTERVIEW WITH MR. NADEEM NAQVI, MANAGING DIRECTOR KARACHI STOCK EXCHANGE

KHALIL AHMED
(feedback@pgeconomist.com)
Oct 1 - 7, 20
12

PROFILE: Mr. Nadeem Naqvi holds the degrees of M.B.A. in Finance and B.Sc. with honours in Banking and International Finance from The City University, CASS Business School in London, United Kingdom. He brings with him 30 years of rich work experience in the global financial services industry operating in diverse environments of Middle East, North America and Europe besides that of Pakistan.

Prior to joining the Karachi Stock Exchange, Mr. Naqvi was the Chief Executive Officer of a leading asset management company in Pakistan. He has served as Chief Executive Officer of AKD Securities Limited which he helped transform from a proprietary business into a full-scale investment banking and brokerage firm and in the process, gained company's recognition as the best domestic brokerage house for two consecutive years. Mr. Naqvi also served as Chairman of the first technology venture capital fund of Pakistan and oversaw the completion of several venture by successful exists.

Market analysis and research has been the hallmark of Mr. Naqvi's career. He has led an independent investment research firm in USA/Canada, Investology Inc., which was ranked by 'BusinessWeek' as the third best out of 300 independent research firms in North America in 2004. Before that, he headed the Merrill Lynch Pakistan research team. He was also the Head of Research of the advisory company of Morgan Stanley Asset Management's Pakistan Investment Fund and prior to that worked at BMA Capital Management Limited as Head of Research.

Mr. Naqvi has been involved in landmark investment banking transactions, including the privatization of Kot Addu Power Plant, National Refinery and United Bank. His association with the capital markets is also longstanding where he served in committees of Karachi Stock Exchange and was a member of the Capital Markets Committee Economic Advisory Council of the President in the last decade.

PAGE: COULD YOU TELL US ABOUT THE VISIT OF KSE DELEGATION TO LONDON?

NADEEM NAQVI: The visit to London, UK in the first week of September, 2012, can be characterized as both timely and useful. Timely, because it had been quite some time that capital market institutions had updated peer institutions in the UK regarding major reforms and developments in Pakistan's Capital Market including, ofcourse now, demutualization of stock exchanges, and useful because the response from our meetings was positive.

The delegation was led by the Chairman of the Karachi Stock Exchange (KSE), Mr. Muneer Kamal and included KSE's M.D. and D.M.D. as well as the CEO of the Central Depository Company of Pakistan (CDC) and some market participants. Our meeting with the London Stock Exchange was very fruitful and we exchanged views and ideas regarding cooperation on various levels going forward, including the I.T. space, Internet based trading capacity, risk management and market surveillance regime, investor base enhancement and other matters of mutual interest. The two sides agreed to continue the process of dialogue agreed and in-principle to an investors conference/workshop on Pakistan Capital Market at the London Stock Exchange in the second quarter of 2013. The delegation also met some Pakistan origin financial institutions in London and discussed how we could facilitate investment by UK based Pakistani origin investors into our capital market.

PAGE: WHAT ARE YOUR VIEWS ON EMERGING MARKET INDEX AND DEVELOPING MARKET INDEX?

NADEEM NAQVI: We met Morgan Stanley Capital International (MSCI) and Financial Times Stock Index Providers (FTSI), both premier global index providers used by major institutional investors worldwide.

The meeting with MSCI focused primarily on our request to MSCI to consider bringing the Pakistan Market back into the MSCI Emerging Market Index CEM Index) from its current status of being part of the MSCI Frontier market Index (FM Index). The key difference between the MSCI EM and FM indicies is that the EM Index covers larger emerging markets and the of funds eligible to invest in EM Index markets is significantly greater than funds focused on just FM Index markets. While the criteria for inclusion in the FM Index are higher than those, for FM Index, Pakistan fulfills all the criteria for the MSCI EM Index. Our submission to the MSCI officials was therefore that they consider opening Pakistan for consultation to be included in the MSCI Emerging market Index.

The meeting was useful and the Pakistan side updated MSCI in great depth regarding capital market reforms over the last 3-4 years, including the new corporate governance guidelines issued by the SECP, investor protection measures instituted by the KSE, CDC and NCCPL, the Know-Your-Customer (KYC) and anti-money-laundering guidelines for brokers, etc. An overview of the macro-economic developments was also provided to both MSCI and FTSE officials. Their response was of appreciation for the update which they found very useful and the two sides agreed to continue to remain engaged on the subject.

PAGE:YOUR VIEWS ON YOUR MEETING WITH MR WAJID SHAMSUL HASAN:

NADEEM NAQVI: We paid a courtesy visit to the Pakistan Consul General in the United Kingdom, H.E. Wajid Shamsul Hassan. The Consul General was most welcoming and gave us a patient hearing. We apprised His Excellency regarding the purpose of our trip to London and the meetings held with various financial market institutions. The Consul General appreciated the efforts by Pakistan capital market delegation to bring greater awareness about Pakistan and investment opportunities in the country to international investors. He assured us of full support by the Pakistan Consulate towards any efforts by our financial institutions in marketing Brand Pakistan in the U.K.

PAGE:YOUR VIEWS ON CELEBRATING PAKISTAN DAY EVERY YEAR AT LONDON STOCK EXCHANGE?

NADEEM NAQVI: Pakistan Day conference and workshop at the London Stock Exchange is an important event that should be organized on a regular basis. While I can not comment on whether this can be an annual event or not, it is clear that such as conference is necessary on a regular basis. One of the frequent comments I hear when travelling abroad to major financial centers is that Pakistan private sector and capital market institutions do not regularly engage and interact with international investors. For example, last year I attended an Asian emerging market conference at the London Business School. There, I highlighted the macro-economic canvas of Pakistan and the large size of our consumer market and its rapid growth. One senior speaker, the Chairman of 'Khazanah', the Sovereign Wealth Fund of Malaysia which managers around US$80billion, was pleasantly surprised regarding the Pakistan market and its potential. He asked me after the conference why Pakistani institutions do not come and highlight the country's potential and said that neighboring countries frequently send marketing delegations from both public and private sectors to meet investors in his country.

In the above context, I believe that Pakistan's corporate sector, industry leaders and market institutions should give due importance to branding and image building of Pakistan and its potential to the international investment community on a continual basis.