20000113

KSE to introduce

on-line trading

through internet: Arif

RECORDER REPORT

KARACHI: The Karachi Stock Exchange (KSE) would introduce on line trading through internet in the year 2000 to give swift access to retail investors, both local and foreign, and would activate trading of debt securities through Karachi Automated Trading System.

Arif Habib, KSE Chairman, said that declining trend in the interest rates, good cotton crop, removal of irritants for the local industry had helped to improve the confidence of the investors and he foresaw some new listings in 2000, which were missing for the last two years.

The KSE chairman, in his induction speech at the board meeting held on Wednesday, said that the steps taken by the military government had restored the investors' confidence and sentiment, which would consolidate further if government resolved the dispute over power tariffs with IPPs.

He added that resolution of the row with the private power producers would bring some better times for the investors in the first year of the new millennium. The market was set to respond positively to the government's policy of privatisation through the stock exchanges, he added.

The government's step to allow repatriation of foreign earnings had been also a positive portent. The State Bank of Pakistan cleared all the pending applications for remittances of sale proceeds of shares to foreign investors and promised to clear them expeditiously in future.

Arif suggested that the government should restore the old system of instant outward remittances to the foreign investors for their sale proceeds. This would greatly enhance the foreign portfolio investment in the country.

Between October 1997 to July 1998, the market saw a huge fall of Rs 381 billion or 62 percent in market capitalisation. This steep fall within a period of about nine months tested the systems of the KSE to its limit, particularly the risk management systems, and it is a matter of pride for the management of the KSE that no untoward incident took place.

The strength of the locals could easily be gauged from the fact that investors were able to absorb the foreign selling worth $700 million smoothly in a period of one and a half years.

The KSE is poised to consolidate all the automation and structural reforms and in 2000 aims to accomplish the following automation projects:-

National clearing and settlement system: This will bring more efficiency, cost effectiveness and fairness in securities trading.

DVP (Delivery versus Payment) system in CDS: This would reduce payment risks and bring efficiency.

On-line trading through internet: This would bring large number of retail investors, both local and foreign to the market.

Members' trading terminals in the trading hall: This will improve the presentation of the exchange and would prove a marketing tool for securities trading and activate trading in debt securities through KATS.

The KSE chief pledged to assist the SECP and genuine and honest companies to get policy support from the government whereas inefficient and dishonest companies would be taken to task. The KSE has already proposed a takeover law and efforts would be made to see its early enactment.

Another matter which needs attention, Habib said, is to review of rules and regulations of the exchange which are in fact required to be re-written according to the needs of the new millennium. Efforts would be made to achieve this objective within this year.