Prospects of Pakistan's capital market highlighted

Rizwan Khalid Butt, Chief Executive Officer of IGI Finex Securities Limited, has said that the overall performance of KSE as one of the highest yielding stock markets of Asia and half-year of 2007 has shown remarkable results for equity investors, and the future potential of capital inflow looks bright.
Addressing a seminar on 'Future Prospects of Commodity & Stock Markets' at Chenab Club, Faisalabad, here on Friday night, he said that a modern and efficient capital market is the backbone of an economy. It plays a crucial role in mobilising domestic and foreign resources, and channeling them to promote investment activities both for the short- and the long-term periods. He said that the capital market channelises money from those who do not have immediate productive use for it to those who do. In other words, serving the role of an intermediary, it directs capital to most productive uses, he added.
He said that the capital market helps a large number of investors to reduce their financial risk through diversifying their portfolios by spreading the factor of risks. The capital market cushions the investor against economic and financial risks. It has been observed that countries with well-developed capital markets enjoy robust economic growth for over a longer period of time, he added.
Rizwan pointed out that Pakistan's capital and stock markets have witnessed impressive growth over last several years on account of market-friendly and investment-friendly policies pursued by the government. The KSE-100 index (Pakistan's benchmark stock market) increased from 1521 points in June 2000 to 12,370 points in April 2007--a rise of over 10,800 points, or an increase of 713 percent.
Similarly, aggregate market capitalisation increased from Rs 392 billion ($7.6 billion) in June 2000 to Rs 3604 billion ($59.4 billion) in April 2007, showing a rise of over Rs 3200 billion ($53 billion), or an increase of 819 percent. The listed capital at KSE also increased from Rs 236.4 billion in 2000 to Rs 535.5 billion in March 2007.
Talking about Commodity Futures Trading in Pakistan, he said that first trade item is gold, while in future rice, cottonseed oil cakes and cotton would be included in trading counter through comprehensive I-Trade network.
IGI Finex Securities is a corporate member of National Commodity Exchange Limited. This newly formed exchange is expected to offer futures contracts in more commodities through its member firms using state-of-the-art technology on an internet based platform. Customers of IGI Finex Securities Limited may trade futures contracts under the rules and procedures prescribed by the Exchange, he said.
Rizwan said that IGI Finex Securities Limited goes another extra mile to provide its clients with a fully integrated online trading platform 'I-Trade'--a true synthesis of tradition and technology with advanced trading systems in place. Clients will now be able to access and manage their accounts via a secured user-friendly interface from their personal computers. I-trade enables customers to trade conveniently anytime, anywhere with access to a range of analytical tools, news updates and stock alert service as well as the option of broker assisted services, he added.
Mansoor Ali, Chief Operating Officer of National Commodity Exchange Limited, spoke about the increasing potential of the stock market for investment with improvements in research and reporting and the involvement of regulatory bodies. He gave an elaborate overview of the Commodity Exchange market in Pakistan and highlighted the future prospects of the commodity exchange as an important catalyst in the development of capital markets. Tanvir Abid, Head of Institutional Sales of IGI Finex Securities Limited, said that the building on the initiative of culturing a financial atmosphere among the youth of Pakistan, IGI Securities has introduced I-trade with a limited time offer where customers can open an account with just Rs 25,000 and at an extremely competitive commission fee of only 0.05 percent which is the lowest in the entire brokerage industry.
Previously, IGI Finex Securities was the first company in Pakistan to initiate the IGI Investment Challenge Game that allowed participating teams to invest in an online trading account with a virtual portfolio of Rs 5 million. The purpose of this contest was to create interest, educate and assist the young people of Pakistan to make better investment decisions in the future. I-trade will provide customers with additional value-added services like nation-wide call centre Facility, he added.
He said that I-Trade would also offer customers with the option of subscribing to the I-trade stock alerts. Through this service, the public can receive daily emails and SMS alerts for closing prices, confirmations, recent announcements and analyst recommendations.
The seminar provided an insight into the future prospects of investment in Pakistan, which was not only to educate businessmen and potential investors about financial atmosphere in Pakistan, but also to equip people with the knowledge to be able to make effective investment decisions.