Pakistan Stock Exchange

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Presentation transcript:

Pakistan Stock Exchange Role of PSX in providing equity & debt Presentation by Richard Morin, CEO March 9, 2019

Pakistan Stock Exchange is the national bourse of Pakistan. PSX at a glance Pakistan Stock Exchange is the national bourse of Pakistan. Market capitalization of PKR 7.69 trillion 546 listed companies 230 active brokers 233,000 retail investors 7 indices *As on 31st December 2018

Diversity of listed companies on PSX *As on 31st December 2018

Historic annualized returns 2009 - 2018 Rates annualized PIB 10YR tenure average T-Bills 6M tenure average Weighted average deposit rate SBP Inflation is 2012-2018 average

Pakistan vs emerging markets Source : MSCI 31st December, 2018

Pakistan vs emerging markets Source : MSCI 31st December, 2018

Investors/Population PSX vs peers Country Market Cap (USD Mn) Market Cap/GDP Investors Investors/Population Pakistan 55,344 18% 237,000 0.1% India 4,139,820 159% 32,000,000 2.4% Vietnam 132,653 54% 2,200,000 2.3% Indonesia 486,766 48% 1,600,000 0.6% Malaysia 398,019 115% 2,530,000 7.9% China 6,324,880 49% 350,000,000 24.6% Canada 1,937,903 17,400,000 47.0% USA 30,436,313 152% 175,000,000 53.4% Source: WFE Statistics, World Bank, PSX Research Data as of December 31, 2018

Economy 70% (?) undocumented Structural issues Economy 70% (?) undocumented Capital sits in informal sector; cannot come to capital markets Over investment in real estate Pakistanis priced-out of real estate while companies are starved of capital National savings scheme Distortions impede capital market development Pakistanis miss out on much higher long term returns on stock market GOP pays extra Rs. 100 bn\year in interest Economic growth suffers

Bond market micro structure Structural issues Bond market micro structure SBP as regulator, issuing agent and clearing agent Only banks are primary dealers Lack of transparency Brokers business model Clearing and non-clearing; brokers vs family offices\prop-trading houses Fee for advice; Separately Managed Accounts Mutual funds platform In-house margin financing

Thank You