Pakistan Stock Exchange (PSX) has proposed an increase in size and depth of the capital market as one of the main budget proposals for 2017-18 to be presented to the Ministry of Finance and the Federal Board of Revenue. This shall be achieved by incentivizing listing of new capital without impacting the revenue collection of the Federal Board of Revenue (FBR). According to budget-makers for the next fiscal year, PSX has responded well to the economic policies experiencing a compound annual growth rate (CAGR) of 23.3pc since December 2013.
The low inflation, low-interest rates, lower budget deficit and stable rupee and low commodity prices have helped fuel economic growth in the country. Moreover, the PSX responded fully to the privatisation offers, generating Rs 275,621,179 in the last three years.
However, during the period of consideration, neither did listed capital increase substantially nor was their considerable growth through the issuance of bonus or right shares. Currently, the market capitalization of PSX is about 35 pc of the GDP as against international benchmark of 100 pc of GDP.
The PSX also revealed that during the recent span of time, local mutual funds have made sales worth Rs 40b to foreign investors and local banks, representing a significant development in the domestic Capital Market.
“We feel that here is a need to increase the supply of securities in the market creating desired depth in it, leading to real investment in the country,” the PSX stated.
