Chinese investors to increase investment in Pakistan’s capital markets

Chinese strategic shareholders of the Pakistan Stock Exchange (PSX) have decided to expand their long-term investment in Pakistan’s capital markets.

As part of this, the consortium will make additional investments to increase its shareholding in the Central Depository Company (CDC) and the National Clearing Company of Pakistan Limited (NCCPL), read an official statement on Monday. 

This was stated by a high-level delegation of the Chinese consortium — comprising the China Financial Futures Exchange (CFFEX), Shanghai Stock Exchange, and Shenzhen Stock Exchange — during a meeting with Securities and Exchange Commission (SECP) Chairman Dr Kabir Ahmed Sidhu.

The SECP has issued the necessary key regulatory approvals, removing obstacles and paving the way for a new phase of financial cooperation between Pakistan and China.

The meeting discussed the development of Pakistan’s capital markets, investment promotion, and prospects for introducing new financial products on the stock exchange.

The Chinese delegation thanked SECP for resolving long-pending regulatory matters and issuing the required approvals.

With SECP’s approvals, the Chinese consortium can now increase its shareholding in the CDC and NCCPL.

The delegation also welcomed the approval to transfer the property management function of the PSX to a separate company.

The new company will manage the exchange’s properties under a Real Estate Investment Trust (REIT) model, allowing the bourse to focus more on its core business activities, market development, launch of new financial products, and strategic growth.

The Chinese consortium delegation was led by Yu Hong, Chief Representative of the China Financial Futures Exchange. It also included Lu Fengsen, Senior Vice President of China Financial, and Zhang Xiaofeng, Director. 

Yu Hong expressed confidence in Pakistan’s economic development and the bright future of its capital markets, stating that the Chinese consortium wishes to play a more active role in the growth of Pakistan’s capital market.

The meeting also discussed the early launch of cross-border Exchange Traded Funds (ETFs) on the PSX and possibilities for providing investors of both countries access to each other’s markets.

A joint task force comprising representatives of the exchanges of both countries has already been established for this purpose.

The delegation also held discussions on introducing modern trading and settlement technologies at the PSX, further strengthening the market surveillance system, launching new financial products, improving market liquidity, and enhancing investor awareness and capacity building.