Various small brokerages of the Pakistan Stock Exchange (PSX) have either exited businesses after receiving proceeds against their stake in the exchange or have merged with the well-grounded brokerage houses, a national daily has reported. This has been a result of small brokerage houses not being able to attract investor funds.
Each shareholder-broker is entitled to Rs40 million as a result of the divestment of the PSX.
At least three brokerage firms, namely MYM Equities Pvt Ltd, Abid Investments Pvt Ltd and Fort Investments Pvt Ltd, have been reported to have chosen to relinquish their TRE certificates following the PSX divestment.
The Securities and Exchange Commission of Pakistan, in a statement issued earlier confirmed that many brokers had chosen to exit the business following the amalgamation of the three stock exchanges of the country.
Moreover, before the PSX deal was finalised, numerous brokers unable to comply with SECP’s tightened regulations gave up their trading licenses.
Nadeem Naqvi, managing director of the PSX is reported to have stated that small brokerage houses have a very small investor base and are usually major investors themselves. Post divestment of the bourse, they either have the option to exit the market or merge. He added that the PSX is focused on allowing growth and professionalism in the market by expanding the customer base.
