Exclusive interview with CEO Lahore Stock Exchange


Updated May 07, 2005



The Managing Director and the Chief Executive Officer of Lahore Stock Exchange, Hamid H. Imtiazi, was confident of the promising and positive future with regard to economy and stock exchange.

Expressing hopes for a brilliant future which is on the threshold, he said that the material universe exists only in the mind, so it is all matter of perception and image which needs to be given the right focus, Imtiazi remarked.

In an exclusive interview, the youthful CEO, dilated on the past, present and future of the Lahore Exchange and the spectacular growth of the capital market in the provincial capital of Punjab. He also touched on the recent crash of capital market, its causes and aftermath.

Imtiazi, who is basically an experienced banker with a lot of international exposure under his belt, traced the history of LSE, which was established in October 1970. It was the second stock exchange in the country after the inception of KSE in 1949. Islamabad followed as the third stock exchange established 19 years later in 1989. But it remains as the insignificant partner in the capital market with a share of barely over one percent.

LSE has steadily grown in recent years to claim a share of around 20 percent of the market. With a membership of 152, it has generally developed small and medium sized retail-based clientele. Unlike, Karachi which remains the biggest hub of business and trading Lahore has come up steadily being the capital of the largest province with strong and expanding economy. It is based more on industry and agriculture which is growing fast.

Imtiazi said, in Lahore apart from small and medium sized related base of its clientele of investors, the number of brokers too is relatively smaller, consisting mostly on individual brokers. The concept of organized and large firms of brokers is, however, slowly catching on.

Another strategy of LSE is to open up its range and services to other cities. It set up a sub-office in Faisalabad in 2004, and is soon to set up another in fast developing industrial city of Sialkot. In this regard, LSE can be described a trail blazer. Karachi still remains without any such expansion and Islamabad is just planning to follow but to open a sub-office in Peshawar.

LSE CEO also said that following a target to take services to the doorstep of investors, the exchange will also open another office soon in Multan an important industrial, trading and agricultural centre of province.



The stock market in Lahore is lucky in the sense that it is surrounded by a number of fast growing economies in Punjab. Efforts are being made to consolidate the wide spread resources by extending arms of the Lahore Stock Exchange. Once the liquid currents of thought start working through the brains and the good governance, the LSE has a strong reason to assume a leading role in the capital market of the country, Imtiazi observed with a sense of confidence.

Talking on the strength of LSE, the CEO proudly recounted development of its IT department. It had fully automated its operations, ahead of Karachi, in 1993, he said. We obtained the software/hardware of first trading engine, before anybody else and subsequently developed our own software called "Ultra", which was also supplied both to Karachi and Islamabad. It has certainly benefited the capital market, he felt.

Imtiazi also referred to the current process of Demutualization of capital market. The move initiated by SECP after an expert committee report and recommendations is closer to our thinking but KSE so far has not come round to agree with the new concept. This calls for change from a "non-profit" to "for profit" concept and better governance, to which we fully subscribe. He said the focus of LSE, had also changed during recent years and its functioning has been considerably streamlined to avoid any room for "conflict of interest". Out of its 10 directors, 5 are elected by the BOD including Chairman and 4 are nominated by SECP to retain a healthy balance.

Asked about the recent crisis, in the capital market, he said it all started in Karachi and Lahore was only affected by its sheer fallout. Its epicenter was all in KSE, but relatively LSE, has been able to survive this grave crisis. Although there were heavy losses here also and investors too suffered, but fortunately there were no defaulters in Lahore. The impact too was relatively lower than Karachi, he felt. Spelling out the corrective steps taken to avoid its recurrence, he said SECP, as regulators have already taken measures to further improve and tighten the risk management.

Another move, he said which is on the horizon is to develop a merger of stock exchange of Lahore and Islamabad, as proposed by SECP. This is to strengthen the market as Islamabad has generally not come up so well so far. However, Karachi is so far not in agreement with this proposal, although Islamabad has not offered any resistance.

There is also a concept brewing to form a national stock exchange after the initial merger of Islamabad with Lahore. So with all these ideas in the melting pot, quite an interesting period lies ahead in the capital market.