SECP to develop ‘bond-pricing agency’ to revive debt market

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KARACHI – The Securities and Exchange Commission of Pakistan (SECP) would develop a “bond pricing agency” to revitalise the country’s debt market that, the apex regulator believes, is currently not ‘vibrant’. Further, the Karachi Stock Exchange (KSE) has called upon the federal government to accelerate the pace of issuing the amended computation rules for Capital Gains Tax (CGT) before functionality of the leveraged products at the country’s bourses.
“Our focus is now the debt market which is not that vibrant,” SECP Chairman Muhammad Ali Ghulam Ali told the inaugural of leveraged market products here at KSE on Saturday. In this concern, the SECP chief said his side had already finalised talks with provinces, while stamp duties had also be rationalised. He said that establishment of a bond pricing agency, availability of an electronic trading platform and government’s borrowing through the capital market are imperative to creating an energetic debt market.
“The government would have to consider borrowing through capital market so that interest rates remain low and transparency is ensured,” the SECP chief said. He said that, unlike the past, present products would have elements of “risk management” and its “disclosure measures” would make these successful. A five-member committee had been formed to recommend ways to further improve the Margin Trading System (MTS), Margin Financing System (MFS) and Securities Lending and Borrowing (SLB), the chairman added.
Calling for a hassle-free execution of the MTS, Ali said that the three stock exchanges would have to shoulder responsibility of extending recommendations to make the new products perfect.
Earlier, acting Managing Director of KSE Haroon Askari termed the new products as viable, robust and profitable for the all stakeholders and requested the Finance Minister Dr Abdul Hafeez Shaikh to expedite issuance of a revised notification on amended rules for the computation of CGT. “Please, expedite the issuance of those proposed amendments before March 14 because market participants are anxious,” the acting MD said. He said that new products would provide the missing link between volume and retail investors at the country’s equity market. KSE Chairman Muneer Kamal also spoke on the occasion.