Market dynamism is on the top priority

SHAMIM AHMED RIZVI, Bureau Chief, Islamabad
Feb 05 - 11, 2007

Mr. Shaharyar Ahmad, President Askari Commercial Bank, has been elected as the Chairman Islamabad Stock Exchange (ISE) by the Board of Directors of the exchange in its meeting held on January 17. He was nominated by the Securities and Exchange Commission of Pakistan as Director of the ISE. Earlier, he had been a Director on the Board of the Exchange during the years 2004, 2005 and 2006. He has also been a Director of the KSE during 2002. He is the second non-member Chairman of the ISE since January 2006.

Basically a banker by profession, Mr. Shaharyar Ahmad has over 30 years experience in Investment and Commercial banking in Europe, Middle East and Pakistan. Presently he is serving as President Askari Commercial Bank Limited.

The ISE is the youngest stock exchange of Pakistan. It has shown a great progress since its inception. At the moment the ISE has over 119 members. Of them, only 39 are operating as brokers. There are 240 companies listed at the ISE. Approximately 90% of the active companies are also listed at ISE. Total listed paid-up capital is around Rs.380 billion with market worth Rs.2210 billion. The average daily turnover is in a dismal state as only 200,000 shares volume is recorded at the ISE's system, whereas the major chunk of the trade is routed through KSE.

Another noteworthy development taking place at the Islamabad Stock Exchange is the construction of 119-storied Islamabad Stock Exchange Towers, which is being build as the state-of-the-art financial center for the capital city of Islamabad. The foundation stone laying ceremony was performed by Prime Minister Shaukat Aziz in March 2006.

According to the future plans, the building shall house the registered offices of the National Stock Exchange, which shall have its head office in Karachi. Besides, many other capital markets-related institutions shall also be provided accommodation under the same roof so as to provide a convenient venue to the investors of the region. The ISE plans to enable all the businesses within this building to stay in constant touch with other financial markets of the world through most modern and next generation data communication facilities in the building. Already many banks and other financial institutions have submitted their expressions of interest for suitable accommodation in the building, pointing out to the rising demand for the most prestigious office location in Islamabad.

The contract for construction of phase-1 of ISE tower has been awarded to M/s Rafiq Habib Limited, a renowned name in the construction field in Pakistan, whereas M/s Nespak has been appointed as the consultant for the project. The ISE tower will be a landmark building destined to become a true investment and financial center of the capital city of Islamabad.

The new Chairman of ISE is ambitious for playing a vibrant and dynamic role for this institution. Keeping the interest of investors to be foremost, Mr. Shaharyar Ahmad is poised to play an active role for the development of this institution. The following issues are at the top of his agenda during the year 2007.

The dynamism of the market is on the top priority of the new chairman. For this purpose, the ISE has entered into an agreement with LSE to form a unified trading platform (UTP). For this purpose necessary trade infrastructure, including regulatory mechanism, has already been evolved. This project is the top most priority for the exchange and after approval by the regulatory authority, the new system shall be commenced. This step would bring liquidity into ISE market and it would also be in the great interest of the investors.

The demutualization would also be a very important issue to be pursued vigorously this year. The exchange has already initiated the process of valuation. Legal and financial advisers for the purpose have already been appointed by the exchange. The exchange shall make all out efforts to get demutalized during 2007.

However, the experiment of having a non-member part time chairman of the stock exchanges selected on yearly basis has not proved a success. The first non-member Chairman of the ISE, Mr. Chughtai of Agriculture Development Bank who remained on this position during 2006, could hardly make any worthwhile contribution to improve the working of ISE. He rarely attended his office in the ISE because of his full time occupation in the bank. Neither had he any experience of the working of stock exchange nor had he the time to learn the trade. This obvious fact should have been clear to his selector or electors before taking this decision.

The same applies to the new chairman. He is fully occupied and has heavy responsibilities to shoulder as president of a big commercial bank. It will not be possible for him to spare time to do justice to his additional responsibilities in a different trade altogether. How he manages to fulfill his ambitious agenda regarding ISE is yet to be seen.