Karachi Stock Exchange (KSE) Managing Director Nadeem Naqvi Thursday said the stock market has provided $1.16 trillion public funds to businesses during last 10 years whereas the government generated Rs 440 billion from stock market through privatisation. He was addressing the participants of a seminar "Financial Literacy & Personal Financial Planning," held at SECP'' head office. As part of its youth programme, the Securities and Exchange Commission of Pakistan organised the seminar in collaboration with Karachi Stock Exchange.
Nadeem Naqvi stated that 90 percent deposits in banks maturity period is less than one year therefore banks cannot fund long-term debts. Therefore, in most of the cases, Pakistan stock market is fulfilling the financial needs of businesses and corporates.
In last 5 years, stock market gave 23 percent return in average. In Pakistan''s capital market the Return on Investment (RoI) increased from 19 percent to 23 percent in last 5 years. In last 10 years cement production is doubled in Pakistan. It is a country where One million cellphones sold out every month that shows the robustness of Pakistan''s economy. Addressing the gathering, Chairman Securities and Exchange Commission of Pakistan (SECP) Zafar Hijazi said that creating awareness on investment and investors'' rights is the regulator''s responsibility and the SECP has been making utmost efforts to educate potential investors.
Hijazi said it is the government''s responsibility to frame the national economy in a way that encouragers savings and investment. It is also the government''s responsibility to put in place all measures to protect people''s savings and investments, he added. As federal institutions, the State Bank of Pakistan (SBP) is responsible for protecting depositor''s money in banking system whereas the responsibility to protect investments made in all other areas lies with the SECP. Zafar Hijazi said that the capital market has played remarkable role in sustaining the national economy as it has contribution over thousand billion rupees in the economy.
While suggesting wise investment tactics, he said that inflation hurts badly savings and investments, so always invest in the areas which beat inflation. The capital areas is one which provide returns more than inflation as the last 10 years average return in the Karachi Stock market estimated as 24 percent as against average rate of inflation which stood at 10 percent. He also advised new investors to always seek mutual funds assistance for making investment in capital market because lack of trading skills may result in damages. Hijazi said that trading in stocks is to balance greed and opportunities, so when an investor starts making loss, he should sell immediately to remain safe from more loss. And similarly, he advised students to buy shares at a time when they are at their lowest and wait patiently to earn good margins.
Chairman SECP said creating awareness about investments and investor''s rights is the regulator''s responsibility and the SECP has been making utmost efforts through its ''Jama Punji'' investor education campaign. He highlighted SECP''s role for the protection of investors through effective regulation and enforcement.
Hijazi noted that the capital market has helped raise over Rs 1,000 billion, which is a huge contribution to the development of our economy. He further added that the capital market can provide protection against inflation, keeping in view that the average 10 year return (2005-14) for the KSE-100 index of 24 percent against 10 percent average annual rate for inflation over the same period. He urged universities who have signed MoUs with SECP to utilise stock trading simulators provided to them for training their students in building portfolios and analysing stocks. Chairman Hijazi advised the students to follow prudent investment principles and consider investing in mutual funds. Mutual funds are ideal for low income investors as these can provide them liquidity, professional management, safe custody and diversification.
Zafar Hijazi advised students that planning and managing your savings and investment is as essential as it is important to take care of your children. Dr Mukhtar Ahmad, chairman HEC was the chief guest. In his address he appreciated SECP''s ''Jama Punji'' investor education campaign. He encouraged the students to learn about savings and also develop a culture of good ethics and fair play. He suggested to the university faculty attending that students should be taught entrepreneurship, and incubation centers should be set up to encourage creation and development of new businesses. He appreciated SECP for organising such a useful and informative seminar.
At a special ceremony during the seminar, Foundation University Islamabad and Capital University of Science and Technology Islamabad entered into MoUs with SECP for holding regular seminars to educate existing and incoming students about the basics of savings, financial planning, investing and capital markets. The MoUs were signed by. Akif Saeed SECP Commissioner IE& IRD, and former Major General Khadim Hussain Foundation University and Malik Arshad Mahmood Registrar Capital University of Science and Technology Islamabad respectively on behalf of their institutions. The ceremony concluded with the distribution of certificates to students.
The seminar was especially arranged for university students and was widely attended by over 300 students from Islamabad area universities including Quaid-e-Azam, NUST, Air, Foundation, University of Lahore, Capital University of Science and Technology, vice chancellors as well as deans and heads of departments. Students were introduced to the concept of capital market, savings, investment, various asset classes, management of risk, investor rights and financial planning by financial industry experts.
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