FM suggests listing of Govt debt securities at PSX
Staff Report
Dr. Shamshad Akhtar, the Federal Minister for Finance & Revenue said that the securities market can play a vital role in the development of the debt market through the listing of Government debt securities on PSX.
Speaking at the inauguration ceremony of the Centralized Gateway Portal, Dr. Akhtar said that the issuance of securities through public auctions at PSX will facilitate retail participation, provide greater transparency, and channel savings, and promote the debt market in Pakistan.
The SECP, PSX, and other stakeholders need to extend concerted efforts to enable efficient implementation of these reforms.
The Minister formally inaugurated the Centralized Gateway Portal, a unique financial initiative that simultaneously onboard investors and customers in the securities market, the NBFC sector, and the insurance industry.
The CGP also offers standardized, one-time KYC requirements across different asset classes. The SECP Chairman, Akif Saeed, and Badiuddin Akber, Chief Executive Officer at CDC also spoke at the launching ceremony.
She highlighted that one of the key issues undermining the growth of capital markets is the lack of liquidity which is directly attributable to the small number of investors.
She believes that the Centralized Gateway Portal can provide the impetus for the much-needed growth of our investor base.
Dr. Shamshad appreciated that the CGP provides immense opportunities to investors and great convenience to market intermediaries by removing duplications and streamlining the customer onboarding process.
She appreciated SECP for its efforts and constructive reforms for facilitating investors’ onboarding, with the potential to transform the landscape of Pakistan’s capital markets.
However, Shamshad said the successful launch of the CGP should not be deemed the end of this project. Having developed this promising digital platform, we are now faced with the critical part of realizing the potential it offers.
This requires focused marketing efforts and promotion on the part of the PSX and other stakeholders like brokers, insurance companies, and AMCs, she added.
Attracting new investors in the capital market should be one of our primary objectives going forward, which requires coordinated efforts from all Capital Market Infrastructure Institutions (CMIIs), as well as the market intermediaries, especially the brokerage houses, under the guidance of SECP.
In addition to the demand-side aspects linked to market liquidity, she suggested to concentrate on the supply side simultaneously. In this regard, it is vital to channel efforts towards increasing the number of Initial Public Offerings (IPOs) on the Pakistan Stock Exchange (PSX).
A greater supply of securities in the market shall enhance liquidity, enabling the generation of higher trade volumes.
She asked the SECP and PSX to work aggressively to create awareness, making the listing process efficient and facilitating businesses in utilizing the stock exchange for capital formation. SECP and FIA to Collaborate for a Secure Digital Financial System
PSX should maintain an IPO pipeline to ensure maximum results and again targets should be assigned in consultation with the CTIs.
Dr. Shamshad asked the SECP and Capital market institutions to collectively review the costs of investing in the capital market, particularly to ensure that maintaining an account is not expensive enough to disincentivize small investors.
She emphasized keeping digitalization with international trends. She said it is important to attract entrants in the newly created sub-category of online-only brokers, with the aim to drive greater competition in the industry.
