Mr. RAHEEL JAVED, Director - WE Online, WE Financial Services Ltd

NAJAM KHAN, Research Associate
Pakistan and Gulf Economist

Apr 23 - 29, 2007

Q. Tell us about yourself and the Group, its agenda of working as WE online biz?

A. WE Financial Services Ltd (WE) is a Corporate Member of the Karachi Stock Exchange Guarantee Limited and has been instrumental in facilitating investments in Karachi Stock Exchange since 1993.

WE's vision is to become a preferred choice for a complete range of financial services.

WE have the privilege of serving recognized financial institutions of Pakistan and similar clientele across the globe through its specialized services of brokerage, equity research and corporate finance. WE's equity sales desk is run by competent professionals revered by their industry peers and is on the forefront to help its clients navigate through the ever changing market situation. The primary role is to offer its customers informed and objective advice to make investment decisions that will help them to attain their financial objectives. WE's equity desk works with its clients to compose a portfolio and monitor its performance so that results are inline with its clients' objectives.

WE, keeping pace with the technological advancement and keeping the customer convenience its top priority, established which provides state of the art online trading platform.

The services offered are unmatched and are backed by systems that are acknowledged by the leading technology provider-Intel®. Efficient system designs lets its customers concentrate on trading rather than frowning on service providers.

Through one can execute investment decision via EZ Trade application, via Trading Zone (website), or via telephone. This ensures that one remains in touch with the market in case of any one of the medium becomes inaccessible.

Q. Stock market have been grown tremendously during couple of years and it's been very challenging and cut-throating for broking companies to sustain and compete amongst each other, what is there for the investors to go for business with WE. What you have planned in this regard?

A. There is no doubt that the stock market has been performing marvelously for few years and this, also, very much true that competition is getting stiff, but this is a very healthy indicator as the competition is always constructive for the growth of the industry and the end consumers become the ultimate beneficiaries. Competition helps in enhancing the efficiency and forces the competitors to make themselves more competent and updated to give timely, valuable and unbiased information to the customer. WE is also following the same strategy of keeping itself paced with the growing competition and demand from the customers and always has maintained its competitive edge by providing superior returns to its stake holders making services in financial markets a standard for the rest to emulate and identifying and investing in new opportunities through competent professionals who act with integrity and best professional conduct for the benefit of our clients.

Q. Mutual Funds, NSS and other investment options offer variety of products, good returns and customized options best suited according to investor's need and appetite backed with tax and other cushions for their investments, how do you convince an investor for stock broking where equity funds return ranges 9-13%, banks and income funds offering 8-11%?

A. Stock broking has always been more rewarding investment than investments in risk less investments in NSS. Investment in Stocks is very rewarding for shrewd investors who can invest in the market carefully and rationally. The most interesting part of stock broking is that the investor can earn as much return as he desires depending upon the information gathered and timely entry and exit from the market as the return is virtually limitless. But this is not as easy as it looks to predict the stock market ,therefore, WE provides full assistance to its customers as WE's equity sales desk is run by competent professionals revered by their industry peers and is on the forefront to help its clients navigate through the ever changing market situation.

Equity desk ensures that its clients are kept abreast of market developments and frequently updates them on the status of their investment instructions. This frequent communication ensures that any change of tactics is communicated immediately and hence any window of opportunity is capitalized.

Q. How do you gauge stock market climate in Pakistan in light with Pakistan political and economic scenario?

A. Pakistan is in the line of fastest growing economies in the region and its stock markets have achieved many milestones by performing exceptionally well for the last few years. The foreign investment has continuously been increasing indicated by SCRA figures that have made highs on highs for the last couple of months. KSE-100 index has crossed the level of 12,000 points; the financial sector has performed remarkably as well. All these indicators depict that Pakistan's economic and political situation is feasible and conducive for investment both for local and foreign investors.

It is no doubt that the economy has entered into real investment cycle due to strong domestic demand and political stability.

Q. What do you think about the policies and actions taken by SECP to govern the stock market operation? Are they inline with what the broker community needs?

A. Policies are always devised with a long term perspective and SECP being the regulatory body is also doing the same. The actions taken by SECP though are not very attuned currently with the broker community but I believe it will have a significant impact in the successful development of the capital market over the years.

Q. Difference between broker v online trading? From your point of view which is more timely, easy, accurate and feasible for investors?

A. Ofcourse, online trading is more feasible and timely for investors because an investor has a dedicated system in front of him and he can trade from anywhere and in real time but on the other hand, the information that the broker possesses about the market by being there, can also not be neglected.

Q. How do you comment on new Risk Management System?

A. As I earlier said that policies are always devised with a long term horizon and any new system when first implemented cannot be flawless. It will always have certain flaws that are rectified with the passage of time. Same goes for RMS. Since being a new system, it also has certain weaknesses that will be improved as and when the system matures and I am positive that this system will prove to be beneficial for the capital market in general and for the broker community in particular.

Q. How do you see the 'demutualization' of exchanges would impact?

A. Demutualization is not a new concept in the world but for Pakistan it is something new and Karachi being the business hub of Pakistan and possesses the largest stock exchange of the country with market capitalization of over $50 billion, demutualization would dilute its separate and premier position which is harmful for KSE in the short term. But on the macro economic level, a centralized platform would further enhance and encourage foreign investment and help in posing a better image of Pakistan globally.

Q. Are you in favor of further increase in CFS limit? Which is already being underutilized?

A. Yes, the CFS limit should be increased as limiting the exposure does not eliminate the inherent risk in the market but on the contrary it negatively affects the market resulting in the stagnation of growth. CFS limit was underutilized in the past due to lack of investors' confidence and interest but now as the market is fundamentally strong and has regained its lost momentum as well as investors' confidence the CFS limit seems to be saturated as the market demand has increased.

Q. How would you comment 'Stock Exchange should take the initiative to go for educating people by conducting workshops and courses for broker as well as new entrants'?

A. I strongly believe that the more the investors are informed the more the industry would be benefited by the rational and shrewd investments by them. Stock Exchange's initiatives towards conducting workshops, seminars and courses for the brokers and new entrants is highly required and would definitely become a need very soon.

Q. There are not much derivative products in our market, when do you foresee such products coming in?

A. This is true that there are not many derivative products in our market and one of the major reasons behind this is that there are very stiff regulations regarding these tools that discourage the investors to participate in them. A very good example is Cash Settled Future (CSF) in which investors are not participating to their full capacity. As the market is growing with a fast pace, there is an insatiable need for multiple avenues for investment and SECP should review their stringent policies so that investors interest in these tools can be rejuvenated so that a healthy and diverse market structure is flourished.

Q. Future plans of WE?

A. WE currently have many plans in pipeline. The top most priority of the company is the geographical expansion which has already begun as WE have started opening new branches. WE also plan to increase the size of the fund managed by WE Investment Management Limited (WE') to Rs. 1bn during the next two years which is currently at Rs. 200mn.