The interim government has decided to reinvigorate the stock market by offering incentives for new company listings and transferring one-third of state-owned entities’ (SOEs) borrowings from the capital market.
This was decided during the Cabinet Committee on Economic Revival’s (CCER) second meeting last week, according to Express Tribune. Caretaker Finance Minister Shamshad Akhtar chaired the session.
During the meeting, the finance minister asked the Federal Board of Revenue (FBR) and the Securities and Exchange Commission of Pakistan (SECP) to address taxation concerns pertaining to listed and unlisted companies and to adopt a method for listing the maximum number of companies on the bourse.
The committee also addressed altering government borrowing restrictions while issuing securities. It was recommended that government securities be auctioned at the PSX, with the state auctioning Shariah-compliant short-term debt instruments.
In the aftermath of the CCER meeting, it was decided that the SECP would collaborate with the Power Division to investigate the possibility of SOEs borrowing from the capital market to meet their financing needs. The participants further proposed that the Power Division facilitate the listing of one-third of companies that comply with corporate sector regulations.
The cabinet committee directed the Ministry of Finance to develop a policy for cabinet approval to secure the stock market listing of for-profit licensed companies. Meanwhile, a subcommittee has also been formed to study the Pakistan Business Portal idea.
On matters concerning the agri sector, a proposal to convert the Crop Loan Insurance Scheme (CLIS) into a larger co-insurance pool structure was considered at the meeting. A decision in this regard still remains pending.
Overall, Finance Minister Shamshad Akhtar is eager to give incentives to capital markets on priority. If implemented, this could help evolve the pension funds business in the country.
