Role of PSX highlighted in raising capital for business growth
ISLAMABAD: Deputy Managing Director (MD) Pakistan Stock Exchange (PSX) Mr. Haroon Askari has said that stock exchange was a great platform to raise capital for business expansion and growth. He said raising capital from capital market was more beneficial for private sector as it also increased the value of equity capital of well performing companies.
He gave a detailed presentation to the business community during a seminar on the formation of PSX and its benefits, especially for small investors. The seminar was organized by Islamabad Chamber of Commerce and Industry (ICCI) in collaboration with PSX.
Haroon Askari said that PSX was among 10 ten best performing stock exchanges of the world during 2012-2015 which reflected the robust performance of corporate sector where earnings on average have grown by over 20% per annum in the last five years while return on investment has averaged nearly 21%. He said during the last 10 years, companies have raised a total amount of Rs.1160 billion in terms of equity capital and debt from stock market, which showed that the capital market was playing an important role in meeting long term financing needs of companies for growth.
He said establishing an integrated PSX would be more beneficial as it would provide a nationwide footprint, attract more investors and provide maximum people better access to the capital market. He said Iran has 4-million investors in capital market, Bangladesh 2-million and India 22-million, but in Pakistan this figure was hardly around 0.2 million, which was far less than real potential. He said lack of knowledge in people and business community about the importance of stock market was the main reason of low investment and there was a great need to create more awareness in people about capital market. He assured that PSX would continue to play positive role for serving the investors and industry for better economic development of the country.
In his message President ICCI, Atif Ikram Sheikh said that the role of stock exchange was very important for the growth of private sector as it provided a good platform to raise capital for businesses, mobilize savings for investment and create investment opportunities for small investors. He said capital markets should come up with some good incentives for SMEs so that SMEs could raise funding from capital markets easily for growth and starting new projects.
He said many investors have lost billions of rupees in capital markets due to market crash and stressed that PSX and SECP should formulate strong rules and regulations to ensure full protection of investors from market abuse so that investors could invest in these markets with confidence.