Getting down unabatedly, the market capitalization of the Pakistan Stock Exchange (PSX) stands below $50 billion these days due to various macroeconomic factors that have been affected by domestic and international indicators.
This was stated by Managing Director, Farrukh H. Khan, while talking to a delegation of business journalists who met him from the platform of the Council of Economic and Energy Journalists (CEEJ).
He noted that the uncertain situation of neighboring Afghanistan, depreciation of Rupee against Dollar, and hike in international petroleum and commodities prices had badly shaken the confidence of local and foreign investors and had negatively impacted the trading of the equity market in the last few weeks.
The market capitalization of the PSX dropped to below $100 billion in recent times and unfortunately declined its listing in the emerging market index — a major blow to its standing among the global equity markets, he said. However, he added, PSX maintains its potential in terms of profitability when it is compared to the returns of the regional stock markets.
Farrukh mentioned that PSX’s average returns remained at 19 percent per annum in the last 20 years which was considered a good performance benchmark.
MD PSX suggested the equity traders should shift their investment pattern from short-term to long-term for the stability of the PSX and its trading scenario. The government should continue the exemption of tax credit for listed companies which will encourage private companies to be part of the equity market leading towards the speedy documentation of the country’s economy, he underlined. He said that newly listed companies of PSX could avail of the 25% tax exemption for the first two years and 10% for the next two years.
Farrukh said that the masses should be given awareness about equity trading in Pakistan, and the role of CEEJ and the media was vital in this regard.