A seminar on the "Implications of
Demutualization of Stock Exchanges" was recently held at Institute
of Business & Technology (BIZTEK). Arif Jatoi, Minister for Food and
Agriculture Sindh was the Chief Guest at this occasion. His Excellency,
Sun Chunye, Counslar General of Peoples Republic of China and Salahuddin
Haider, Advisor to the Chief Minister Sindh for Information and Archives
were the guests of honour. Habib-ur-Rehman, Chairman ABAMCO; Muhammad
Aslam, former chairman NDFC; Professor Iqbal Ismail and Shabbir H. Kazmi,
Editor Special Projects, Pakistan & Gulf Economist discussed the
topic at length.
Demutualization of stock exchanges is taking place
around the globe. In some of the countries it has already become a
reality and others are also moving in this direction. Asian Development
Bank has suggested to the local stock exchanges to consider this and
also promised the necessary assistance. The economic implications and
consequences of demutualization need to be discussed without prejudice
and BIZTEK provided the opportunity.
Arif Jatoi said, "Stock market is the major
driving force for economic development. Therefore, discussion of stock
market issues at this time is extremely important." He said that
the country was passing through the transitory process. The time of
bi-polar division of the world has been over. The glossary of third
world, cold war, communism and closed economies have become redundant
terms. Therefore, people should talk about transitional economies and
prepare ourselves for free trade regime and to face the challenges of
In the welcome address, Dr. S. M. Makhdumi, Director
Academics of the Institute highlighted the objective of the seminar and
the role BIZTEK wished to play in creating awareness among the future
business managers of Pakistan.
Shabbir Kazmi talked about the need for
demutualization and the concerns of investors, particularly small
investors. He was also of the view that most of the equities market
crises were 'broker led' indicating the weakness of regulatory
structure. Since the brokers have assumed different roles, leading to
conflict of interest, there is a need to minimize the influence of
brokers' fraternity in day to day affairs of stock exchanges.
Professor Iqbal Ismail talked about the objectives,
approach and the whole process of demutualization. He suggested that
Pakistan can benefit from Indian experience. The Indian model may not be
the best but appears to be more realistic.
Habib-ur-Rehman highlighted the problems related to
decision making and implementation of policies at Karachi Stock Exchange
(KSE). He was also of the view that the SECP nominated directors at KSE
often failed to make a positive contribution, mainly because they did
not attend the Board meetings.
In his concluding remarks, Dr. Ayub Mehar, Dean,
BIZTEK said that a large number of members of the Federation of
International Stock Exchanges favoured the process of demutualization.
However, it is important that internationally, demutualization does not
change the functions of an institution, it changes the governance
structure. Dr. Mehar also informed that the seminar was part of core
activities being undertaken by the Institute. He also informed that the
institute would conduct a series of discussion programmes and workshops
on this important issue and finally prepare the official research report
on the topic.
The event was finally concluded with the distribution
of plaques as the token of appreciation to the respected speakers and
the honorable guests by Noman Abid, Chancellor of BIZTEK.