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Markets

Pakistan Stock Exchange launches first-ever ETFs

The ETFs are investment products combining the returns offered by the stock market with the diversity offered by a
24 Mar 2020
  • The ETFs are investment products combining the returns offered by the stock market with the diversity offered by a mutual fund.
  • The bourse has launched two ETFs, namely the UBL Pakistan Enterprise ETF (UBL-ETF) offered by UBL Funds and NIT Pakistan Gateway ETF (NIT-G-ETF) offered by NIT.

The Pakistan Stock Exchange (PSX) has launched the Exchange Traded Fund (ETF) on Tuesday. With this product, PSX has joined the list of stock exchanges in the world offering ETFs.

The ETFs are investment products combining the returns offered by the stock market with the diversity offered by a mutual fund. The bourse has launched two ETFs, namely the UBL Pakistan Enterprise ETF (UBL-ETF) offered by UBL Funds and NIT Pakistan Gateway ETF (NIT-G-ETF) offered by NIT.

Given the current circumstances, a kind virtual launch was organized by PSX for the launch of the ETFs.  “The introduction of ETFs is a big leap for the asset management industry and stock market in Pakistan as this product offers significant growth potential due to its transparent nature, low costs and embedded ability to track the index by following a passive investment strategy. I am confident that the launch of UBL Pakistan Enterprise ETF and NIT Pakistan Gateway ETF will fill the void for a low-cost exchange-traded product and would be instrumental in enhancing the market depth and liquidity,” the SECP Chairman, Aamir Khan said in his address, read a PSX statement.

He further urged upon the SROs and industry players to focus on three key areas going forward namely: 1) Innovation and New Product Development, 2) Proactive Use of Technology for Expanding Market Outreach and 3) Governance and Prudence.

The MD PSX, Farrukh Khan said, “It is an exciting development and a new chapter has been added after a very long time to the narrative of the Pakistani stock market in the form of ETFs. The reason that it all took time was the challenge in finding optimal solutions acceptable to all stakeholders and which were also in the best interest of investors. Now that the ETFs have been introduced, we are hopeful that it will make the market more attractive to all investors, especially retail investors”.

He further stated: “Looking at the growth trends of ETFs globally, I am confident that there is great potential for ETFs in the Pakistan market as they are an ideal, cost-effective instrument for investors who wish to take advantage of the attractive valuations in the Pakistan market”.

He hoped that this product would prove to be an attractive avenue of investment, especially for small investors, given the current economic situation prevailing at home and around the world.

The MD of NIT, Adnan Afridi, said, “NIT’s Pakistan Gateway ETF will provide an attractive investment avenue for both large and small investors. Given the current downturn in the market, the NIT Gateway ETF presents a valuable opportunity for investors to take a diversified exposure to the Pakistan market”.

JS Global is the Market Maker, which provides liquidity for the investment product behind the first ETFs launched at Pakistan Stock Exchange. Its CEO, Kamran Nasir said, “With the launch of these ETFs, we are now entering a new phase of derivatives products and services