December 16, 2024

PSX representatives meet Infotech officials along with International Representative of Ethiopian Securities Exchange (ESX) & Ethiopian Capital Market Authority (ECMA)

The PSX Lahore team along with Dr. Yasir Mehmood from Yasir Mehmood Securities (Pvt) Ltd. conducted a meeting with Infotech officials along with International Representative of Ethiopian Securities Exchange (ESX) & Ethiopian Capital Market Authority (ECMA). The PSX team delivered a comprehensive presentation covering the Pakistan Stock Exchange (PSX), its functions, the capital market ecosystem, recent developments, and its role in capital formation. The session began with an overview of PSX’s shareholding pattern and its products, such as the ready market, regular market, square-up market, and futures square-up market. The performance of the KSE-100 Index (2014-2024), KMI Index, and price-to-earnings ratios were compared with regional exchanges. Key developments discussed included the Roshan Digital Account (RDA), Sahulat Account, Shared KYC, GIS, GEM Board, digital TREC certificates, and collaborations with Karandaaz. Achievements like the GIFA Award and the launch of ETFs were also highlighted.

The Ethiopian delegation showed interest in comparing their developing capital market with PSX. The PSX securities broker shared critical insights, noting Pakistan’s low investor participation—0.31% compared to India’s 7.5% and the US, where over 50% of the population invests in stocks or mutual funds. He also compared market capitalization of PSX-listed companies with top Indian and US companies. The Ethiopian side revealed they are in the process of setting up a stock exchange with 5,000 investors and no listed companies yet.

The securities broker emphasized PSX’s established infrastructure, including CDC, NCCPL, and robust trading mechanisms. However, he noted real estate incentives in Pakistan divert capital, hindering market growth. He advised Ethiopia to develop a capital market that is Fair, Efficient, Liquid, and Transparent (FELT). He explained IPO processes, including the book-building method, participation by institutional investors and small investors, and the pricing mechanism. For derivatives, he highlighted Pakistan’s deliverable futures and the need for transitioning to cash-settled futures and standardized contracts for a robust market.

The Ethiopian delegation also inquired about clearing and settlement processes, CDC operations, and brokerage mechanisms, which the broker addressed in detail. The session was highly interactive, with all queries regarding PSX’s working model and broker operations being duly addressed.