Financial markets: Coronavirus drastically damaged performance: FPCCI VP

KARACHI: Khurram Ijaz, vice president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), said that the outbreak of the coronavirus had not only affected trade and industry of Pakistan, but it had also drastically damaged the performance of the financial markets.

Chairing a webinar on the "Implications of Covid-19 on the Financial Market/Institutions of Pakistan", he said that the measures taken by the State Bank of Pakistan (SBP) to mitigate financial and economic impact of the coronavirus were appreciable. However, it was essential that the benefits of such measures reached the grassroots.

Arjumand Qazi, group head (SME) of Pak Brunei Investment, said that the SBP had indeed extended its maximum support to trade and industry in terms of designing and announcing effective financing schemes since April. However, commercial banks and other financial institutions were still reluctant to extend such facilities to rural businesses.

Khurram Shehzad, a renowned financial expert, appreciated the SBP's cutting the interest rate from 13 percent to almost seven percent in the last six months. He said that it was high time the commercial banks, the investment companies and other stakeholders in the financial market played their role in ensuring the survival of the economy.

Hasan Raza, head of project management at the research department of the Pakistan Stock Exchange (PSX), said that the Pakistan Stock Exchange fell to 27000 index points in February at the start of the lockdown, but with the efforts of the PSX, the KSE index had reached up to 40,000 points in August.

He also discussed the newly-launched mutual funds and the new Sukuk bonds. Zubair Haider Sheikh, head of corporate and investment banking at the Dubai Islamic Bank, said that as the country had been moving back to normality amid easing of the lockdown, the commercial banks must come upfront to expand the Temporary Economic Refinance Facility (TERF) as well as the long-term financing schemes.

Ahsan Mahenti, MD of Arif Habib commodities, while appreciating the SBP's initiatives to fight the financial losses suffered by the businesses during the lockdown, said there was still need for incentive-driven policies to support the corporate sector.

Copyright Business Recorder, 2020