Debt securities: Bank Alfalah first bank designated as market maker by PSX

KARACHI: Pakistan Stock Exchange (PSX) and Bank Alfalah on Tuesday signed an agreement at a ceremony held at PSX trading hall.

Under this agreement, Bank Alfalah has now become the country’s first commercial bank designated as a market maker for debt securities at Pakistan Stock Exchange. Farrukh H. Khan, CEO, Pakistan Stock Exchange, and Atif Bajwa, President and CEO, Bank Alfalah, signed the agreement. Present at the ceremony were Sulaiman S. Mehdi, Chairman PSX; Ali Sultan, Group Head of Treasury and Capital Markets, Bank Alfalah; Board members of PSX and senior management of both the organizations.

On this occasion, Farrukh Khan, the CEO of PSX, said, “Growth of the debt markets is an important strategic objective of PSX and critical for the economic growth of Pakistan. In line with the recent regulatory changes introduced by SECP and PSX, I am very happy that Bank Alfalah has been approved as the first market maker of debt securities at the Exchange. This will usher in a new chapter in the growth of debt markets, thereby ensuring a deep, liquid and transparent secondary debt market in Pakistan. This will benefit both issuers and investors”. He further stated, “Bank Alfalah has a long standing commitment to the capital markets and is one of the few banks with a presence in both the brokerage and asset management industries. Hence, I am particularly happy that they have also taken this step to become the first bank to become a market maker on PSX. This will help to further develop Pakistan’s debt market to regional and international levels. This requires all stakeholders in the financial system to play an active role and we believe that this is a significant milestone in the development of the debt markets in Pakistan.”

On this occasion, CEO of Bank Alfalah said, “Bank Alfalah would like to thank SECP and PSX for their continued efforts in developing and promoting the capital markets of Pakistan. Sharing the same vision, we believe that a well-developed capital market is important from both issuer and investor perspectives. At present, the domestic market is primarily focused on bank loans for financing requirements.

This needs to be complemented by capital market instruments as an alternative and effective financing medium. Corporates should be encouraged to tap capital markets so that the borrowers can diversify their sources of funding, while investors can have multiple options for investments”.

Ali Sultan, Group Head Treasury and Capital Markets at Bank Alfalah stated, “Bank Alfalah remains committed and excited to play a role in bringing efficiency and reducing transaction costs for participants via active market-making in debt instruments. We plan to take this ahead further by assuming a similar active role in other markets such as ETFs.”

He further emphasised, “Bank Alfalah remains a firm believer that vibrant markets are critical for developing the savings and investment culture amongst retail investors.”

Bank Alfalah becomes the first market maker for debt securities on PSX.

Bank Alfalah will be able to perform market making activities for various debt instruments such as Government Debt Securities like PIBs, T-Bills as well as Sukuks. Market Makers perform the crucial role of providing liquidity and depth to the market by continuously quoting two way, ie, bid and offer, prices, helping investors to buy or sell securities.

Copyright Business Recorder, 2020