SECP INITIATES KNOWLEDGE BASED CHANGES IN CAPITAL MARKET
ARRIVAL OF CREDIT SUISSE A MAJOR EVENT IN THE STOCK MARKET
July 14 - 20, 2008
In an attempt to save the market once again, the SECP and the three bourses including Karachi Stock Exchange held a meeting with institutional investors to discuss the concept of an 'Equity Market Opportunity Fund' worth Rs50billion.
However technicalities need to be addressed as none of the institutions have shown their willingness to confirm their participation.
The KSE-100 Index once again dropped by 77.30 points to close at 11695.82 amidst subdued volumes at 21.6million shares on the last trading session of the week. No support was witnessed towards the closing either.
The Security & Exchange Commission of Pakistan (SECP) has however taken a significant step by striking at the root cause of problems that is lack of professional knowledge of the financial regime among the people involved in the capital market.
Working in the right direction, the SECP has launched a program of analyst certification program in collaboration with the CFA Institute and CFA Pakistan.
Raziur Rehman Khan at the official launch of the certification program told media at a briefing that certification program will go a long improving professional capacity of the participants and stake holders of the financial market.
The present environment in Pakistan 's capital markets does not foster or mandate minimum levels of required knowledge for capital market participants or intermediaries. He said that various types of financial intermediaries operating in capital and money market who need to be trained and certified in order to improve the overall profile and functioning of the capital markets in the country. The SECP Chairman also announced 50 scholar ships for the deserving candidates who passed through CFA level-1 and another 100 scholarships for the local module. The scholarships will be awarded on need-cum-merit through a transparent mechanism which will be determined by the Board of the Institute of capital markets.
Dr. Ashvin P. Vibhakar, CFA Deputy Head of Asia Pacific operations for CFA Institute, Khalid Ghayyur CFA and Mohammad Shoaib CFA were also present on the occasion.
Dr. Vibhakar while highlighting the functions of CFA institute expressed his confidence that in collaboration with SECP the certification would certainly help improve the professional excellence of investment professionals in Pakistan .
Replying to a question regarding political pulls at the highest level which were used in market manipulation in the past, he did not agree of such involvement in the market, however, he said that for smooth running and ensure transparency, various measures are being introduced including, the NIC cards of the participants in any transaction is being made mandatory to have a clear picture of the market.
He asserted that market behavior of three four months should not be judged and cannot be judged for its depth and performance.
ARRIVAL OF CREDIT SUISSE AN INTERESTING DEVELOPING
Credit Suisse Group, Switzerland 's second biggest bank in the financial market of Pakistan is certainly an interesting development which ultimately lends a supportive hand in the development of capital market in Pakistan .
Actually, the Credit Suisse is not entering into retail banking business in Pakistan in fact their program is to introduce broking services and equity research in Pakistan . The Pakistan operations of the bank will be looked after Farid Khan who carries a vast professional experience to his credit.
It may be recalled that Credit Suisse returned to securities brokerage business in India last year with a focus to boost revenue from Asian markets. The market value of Pakistan 's bench march KSE-100 Index surged from $5 billion in 2001 to $45 billion currently offer considerable attraction to foreign players.
The senior leaders of the bank consider Pakistan market and economy having potential to rise in the years to come. In fact, they bank considers the present time as the best one to investment and cultivate future benefits.
Kai Nargolwala, CEO OF credit Suisse in Asia Pacific says that the launch in Pakistan is evidence of strong commitment to Pakistan and signals our intent to serve as a bridge between Pakistan and the international investor community. We will continue to develop our research and sales platform with a view to offer institutional client's full scale broker-dealer services in the first half of 2009.
Farid Khan, Director at Credit Suisse who will be leading the efforts to grow the Bank's equities business in Pakistan joined the bank in 2007 from MCB Asset Management Company.
Elaborating their focus on Pakistan , Farid Khan says that Credit Suisse investing in Pakistan because it has an exciting economic story that offers attractive opportunities to investors. They feel that low valuations and high dividend yields male the KSE one of the most compelling long term investment prospects in the region.
Pakistan 's low proportion of foreign trade in GDP, young population and low levels of external debt should help the economy counteract global turbulence.
Establishing a local presence in Pakistan demonstrates Credit Suisse's commitment to the Pakistani market and its clients. Pakistan 's economy and market potential is not very well understood or marketed internationally and that is one of the areas in which we feel credit Suisse can make a difference.
KSE-100 is down 14.51 percent, which compares well against emerging markets indices in countries such as Vietnam-53 percent, China -48 percent, India-36 percent, Philippines 35 and Indonesia 16 percent. The KSE performed well when compared to Asia PACIFIC leading indices.