Rana Muhammad Afzal Khan, Minister of state for Finance visited Pakistan Stock Exchange (PSX) yesterday to meet members of the Board of Directors of PSX, market participants and senior stakeholders.
Mr. Muneer Kamal, Chairman PSX Board welcomed the Hon’ble guest and thanked him for taking own initiative to visit PSX. Mr. Kamal congratulated Mr. Khan for his appointment as Minister of state for finance at the time when the budget for the fiscal year 2018-19 is to be presented in the National Assembly in couple of months and the relevant strategy has to be discussed by the cabinet prior to that.
Mr. Muneer Kamal made a brief presentation on various stages PSX passed through since 2012 when it was demutualized, integrated with other two stock exchanges in early 2016 and finally divestment of equity to Chinese Consortium followed by self-listing in 2017. The Chairman PSX Board enumerated various issues which are contributing to decline of capital market and expressed his confidence that Government would be able to resolve these issues, with the assistance of persons in the Ministry of Finance, having extensive exposure to finance and capital market. He emphasized that capital market improvement is in the interest of Government as well as other stakeholders to boost economic activity as it is face to the outside world and perception indicator of Pakistan.
On this occasion, Mr. Arif Habib, a senior market participant, while giving an overview of past and present performance of PSX, stated that KSE-100 Index fell by nearly 20% in 2017 and negative performance is primarily attributed to increased taxes alongside political and economic woes, thus resulting into a directionless market, foreigners’ outflows instead of inflows despite MSCI upgradation. Mr. Habib presented various recommendations for market development, which were recently submitted to Prime Minister as well as Ministry of Finance. These included providing tax incentives for 5 years to companies to be listed, Removal of tax on Bonus shares or at least to impose such tax on face value rather than market value, Reduction in Advance Tax on Brokerage Commission, Reduction in corporate tax rate and removal of Super Tax, Reinstating the holding company tax treatment, Foreign Currency investments by attracting non-resident Pakistanis, listing of Government Projects of significant value particularly from CPEC, rationalization of tax on REIT and cutting down the rate of tax on Capital Gains along with the related holding period.
The other stakeholders present in the meeting also expressed their views on various matters concerning the market and suggested various measures to bring improvement in capital market. The Hon’ble Minister while listening to these suggestions, stated that after the extensive discussions, he is able to know a number of facts. He assured to extend full support for taking them to right forum for possible implementing the same. He added that growth of Capital Market will be a success both for its stakeholders and the Government.
The Chairman PSX Board thanked the Minister for his visit to PSX and meeting with the Board members as well as market participants.