Investors advised caution in capital market bull-run

The Chairman of the Board of Directors of Karachi Stock Exchange, Mohammad Yasin Lakhani, on Saturday said there would be bull-run in the capital market, but in the same breath he advised caution.
The bulls would be riding the capital market in the coming days, but the investors must think well and read about the performance of the company before committing any funds, he told a questioner.
Speaking as chief guest in the second session of 'National Privatisation Conference 2005', here he said people were mistaken who say that the government only suffered loss on paper whenever the KSE index fell. The Government of Pakistan holds 43 percent stakes in the KSE and bearish spell causes actual loss to all stakeholders, he added.
He said that the government could solve the present unpredictable fluctuations by coming to the market with new offerings. But, he said, "it should come with sizeable offerings".
He said that he had requested the Privatisation Minister not to comment on privatisation, except for announcing the date of privatisation and "it should always accompany the timelines for the process which should be implemented".
The comments on the privatisation without time lines stirs the market unnecessarily, creating ripples. Thus, the manipulators of the market exploit the situation. Substantiating his plea, he said that in the case of PTCL, time lines were also announced at the time of making announcement of privatisation. That helped the scrip to move towards stability.
He said the rising mark-up rates would force the corporate sector to seek funds from the capital market as the cost of borrowing from banks is quite high compared to capital market.
There is no question of Arab funds' going back to western banks after fruitful efforts of the government to divert these funds to Pakistan. However, he said, the government should identity the mega projects which need foreign and local investment, prepare their schedule and time lines and then float them in the market.
He said the capital market has enough capacity and capability to finance these funds.
Earlier, Chief Executive Officer of Arif Habib Financial Services, Chief Executive Officers of AKD Securities Nadeem Naqvi, and Director Research Jahangir Siddiqui Securities M Sohail spoke on the role of stock markets for privatisation and investment.
The conference was organised by Institute of Cost and Management Accountants of Pakistan in collaboration with Ministry of Privatisation & Investment.