Rising commodity prices, depreciating rupee shake investors’ confidence
KARACHI: Uncertainty in neighbouring Afghanistan, continuous depreciation in the rupee value and hike in the international commodities prices have shook the confidence of the local and foreign investors, which was reflected in the trading activity at the equity market.
“Getting down unabatedly, the market capitalisation of the Pakistan Stock Exchange (PSX) stands below $50 billion these days due to various macroeconomic factors that have been affected by the domestic and international indicators,” PSX managing director Farrukh H Khan said, while talking to newsmen.
“The market capitalisation of the PSX dropped to below $100 billion in recent times and unfortunately declined its listing in the emerging market index, a major blow to its standing among the global equity markets,” he said.
However, the PSX maintained its potential in terms of profitability, compared with the returns of the regional stock markets.
Farrukh said the PSX’s average returns remained at 19 per cent/annum in the last 20 years, which was considered a good performance benchmark.
The PSX official suggested the equity traders should shift their investment pattern from short-term to long-term for the stability of the PSX and its trading scenario.
“The government should continue the exemption of tax credit for listed companies, which would encourage private companies to be part of the equity market leading towards the speedy documentation of the country’s economy,” he underlined.
He said the newly-listed companies of the PSX could avail 25 per cent tax exemption for the first two years and 10 per cent for the next two years.
Farrukh said that the masses should be given awareness about equity trading in Pakistan.
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