Macroeconomic environment improvement led to increased incorporation of companies in FY 2017

ISLAMABAD: Improvement in the macroeconomic environment of the country has led to increased incorporation of companies in FY 2017 as the Security Exchange Commission of Pakistan (SECP) incorporated 8286 companies in financial year 2017 compared to 6200 companies in FY 2016.

The SEC Policy Board, which met here Tuesday was informed that the incorporation of companies had seen tremendous increase of 109.24% growth during 2013-17.

This trend continued during the current fiscal year as the first quarter saw 64% growth compared to the corresponding quarter of last year. This reflected the reforms undertaken by the Securities and Exchange Commission of Pakistan, an SECP statement said.

The board was convened to approve the SECP's annual report and audited annual accounts for the financial year 2016-17. Chairman, SEC Policy Board and Federal Secretary for Finance Shahid Mahmood chaired the meeting.

The Policy Board also expressed satisfaction over the fact that foreign investment was reported in 562 new companies, including 33 from China. It showed that the China Pakistan Economic Corridor (CPEC) factor had started contributing to growth.

The board also observed that the audited annual accounts for FY 2016-17 showed impressive financial soundness of the regulatory body, evident from the 14% year-on-year growth in the SECP's financial strength.

In addition to the strong financial performance, the SECP carried forward its legislative reforms in the last few years, in line with the financial reform agenda of the government.

The SECP was able to get nine primary legislations passed by the parliament, including the Securities Act, the Futures Act, the Companies Act, the SECP Amendment Act etc, while five new bills had been proposed.

The meeting was also informed that the SECP successfully processed the approval/amendment in over 80 secondary rules/regulations under laws administered by it.

The meeting noted that the SECP excelled by creating an enabling business environment through a series of reform measures that significantly improved the overall business climate in the country.

As a direct consequence of the above measures, a growth of 34pc in the rate of corporatization, significant and broad-based growth in the specialized companies, including asset management and microfinance areas, and finally Pakistan's upgrade from a frontier market to the emerging market category under the MSCI's Emerging Markets Index in 2017 after a gap of nine years were achieved.

The finance secretary emphasized to continue to build upon these achievements and its facilitation based commitment to corporatization and economic growth through a combination of promoting ease of doing business and nurturing investor's confidence.

The board hoped that the SECP would continue with its sector based reform agenda to ensure adequate growth in securities market, corporatization, insurance and specialized companies' arenas so that they could meaningfully supplement the development of Pakistan's economy by way of deepening the debt capital markets.