LAHORE: The Board of Directors of Pakistan Stock Exchange Limited (PSX -1.93 per cent) announced the financial results of the exchange for the three months period ended 31 March 2018. As per the results, the exchange declared a loss after taxation of Rs5.63 million and negative earnings per share of Rs0.01.
According to the financials, PSX reported a loss in the third quarter of 2018, similar to the second quarter.
The exchange reported total income of Rs2.04 billion in 3QFY18 slightly above Rs2.00 billion in the previous quarter, declining a whopping 31 per cent compared to Rs3.00 billion in the same period last year. This resulted in loss after taxation of Rs5.63 million and negative earnings per share of Rs0.01 same as the last quarter.
Meanwhile, income from ‘exchange-operations’ declined by Rs48.2 million to Rs87.9 million, as compared to Rs136.09 million in 3QFY17.
Pak-Kuwait Investments Assistant Vice President Adnan Sheikh told Pakistan Today that income from exchange operations halved amid a slowdown in trading activities, in addition to, a lack of new IPOs pushed the exchange to the edge.
He added, “absence of management fees of investor protection fund, which stood at Rs28.9 million in 3QFY17, now being operated by National Clearing Company of Pakistan Limited (NCCPL), combined with the loss in operating income has resulted in PSX loss.”
While talking to Pakistan Today, Capital Stake Research Director Maha Jafer Butt said, “The exchange is expected to introduce new products like exchange-traded-funds and a new trading platform along with taking steps to boost investor confidence.”
It is pertinent to mention that earlier in March 2018; PSX CEO Richard Morin while talking to Pakistan Today said an exchange-traded fund (ETF) will be launched on the bourse in the second half of the current year. He added that the launch of an ETF is part of his plan to increase the number of retail stock investors. “We are currently in talks with at least two financial institutions, which are interested in becoming issuers of the ETF,” he said. “Our challenge is to get more and more middle-class Pakistanis, which are around 40 million, to invest through the PSX,” he added.
An ETF is a derivative product that ordinary investors will be able to buy and sell on the PSX in the same way that they trade a typical stock. But unlike a stock that symbolises the ownership in a single company, an ETF represents the value of a basket of listed companies. Like an index-tracking mutual fund, an ETF allows investors to have exposure to a large number of listed companies through a single transaction. As a result, investors benefit from any price appreciation and dividend declaration from the constituent companies.
At the close of trading on Wednesday, PSX shares were trading at Rs24.38 per share, down Rs0.48 or 1.93 per cent from the start of the day, while only 0.16 million were traded.
