Pakistan Stock Exchange (PSX) is the equity and debt market which could offer immense potential for the government to raise appropriate funds for mega public sector projects such as dams.
Speaking to the media at Karachi Press Club, Raeda Latif, an official of PSX said the government needs over Rs. 990 billion at the moment to carry out various development and maintenance activities of operations and news dams which could not only be raised through commercial banks a foreign multilateral agencies but through PSX as well.
Various projects of the public sector including water supplies, power generation, motorways, highways, ports and etc. could be accomplished through raising capital from the emerging debt market, PSX.
So far the government has raised an amount of nearly Rs. 12 billion through crowdfunding for Diamer-Bhasha and Mohmand dams. The huge required amount or a part of it could be sourced from the equity market besides commercial banks, she added. She mentioned that the government raised funds directly and indirectly through Pakistan Energy Sukuk to the tune of Rs. 200 billion each, which depicts the capacity of PSX as a very important platform to generate money.
Various projects under China Pakistan Economic Corridor (CPEC) could also be accomplished through using instruments of PSX for debt sourcing, she said and added, raising funds through PSX is not only saves money when it compares to banks and foreign agencies but it is easier without the involvement of conditions of sovereign guarantee and risk of depreciation of Rupee.
PSX Demands for Government
MD PSX, Farrukh H Khan said the government should introduce various incentives and exemptions to attract companies to make their listing at Pakistan Stock Exchange mainly to boost up the economy but also to promote documentation and transparency in the economy.
He said the government should make it mandatory for State Oil Enterprise to get listed from the stock market. It should restore the incentive of tax rebates for new listing companies and reduce the tax incidence on individuals on the basis of their participation at the stock exchange.
Different governments in the world have made it mandatory for the companies to make their listing with the PSX mandatory when the companies’ asset value surpasses a certain limit.
The government should encourage telecoms and state-run organizations to make a listing at PSX, he remarked.
PSX moved to frontier markets from emerging markets due to reduced value of capitalization but its standards are in part with international standards.
There are 531 listed companies at PSX with seven companies listed in 2021. Various new companies are in the process of their listing at the stock market, however, a few of these postpone the listing due to concerns of global oil prices and global and political uncertainties.
PSX offers attractive dividends in double-digit (12-14 percent) which are far better than other stock markets which offer 6 to 7 percent, MD PSX said. We have eased off regulations to attract local investors including corporations and individuals. Hence various conditions such as biometrics have been waived off. Various measures are being taken in line with the Roshan Digital Account that will allow individuals to open accounts at PSX on the basis of their bank account, Farrukh further said.
