According to a statement on Tuesday by the China Financial Futures Exchange Director You Hang, investors will soon be able to invest in a Pakistan exchange-traded fund (ETF) in China.
An ETF represents a basket that consists of underlying assets, like stocks. Similar to a normal share, it can be traded at the stock exchange as well.
While speaking at the second Mergers and Acquisitions Conference organized by TerraBiz, Hang suggested that Chinese shareholders in the PSX aim to introduce derivative products in the national equity market.
You said in the meeting, “Not only do we want to bring ETFs here in Pakistan, we also want to introduce Pakistan ETF into the Chinese market.”
The consortium, under which the China Financial Futures Exchange falls, acquired a 40% stake in the PSX recently.
Mr. You agreed to the fact that the IT system of the PSX must be modified in a better way. According to him, various events occurred in the past which forced him to make such a statement. These included a suspension of trade on 25th October apparently because of a “technical fault”. There have also been reports of data leakages by many brokers giving an unfair advantage to a few players.
According to You, the development of China-Pakistan Economic Corridor (CPEC) provides a good opportunity for raising money through the PSX.
You believes that it is better for firms to generate capital through the stock exchange instead of borrowing through banks. He said, “The CPEC is a huge opportunity for the PSX. A lot of Chinese firms are working here. They are trying to find ways to raise funds.”