Federal Minister for Finance and Revenue Muhammad Ishaq Dar said on Wednesday that the government has prepared a future roadmap for the next three years to achieve GDP growth as high as seven per cent. According to this roadmap, measures will be taken to raise the foreign reserves to $30 billion, fix the fiscal deficit below four per cent of GDP and maintain inflation within single digits.
He was addressing a meeting at the Securities and Exchange Commission of Pakistan (SECP) head office to facilitate all the stakeholders of capital market on MSCI reclassification of Pakistan’s Capital Market in the ‘Emerging Markets’ category.
Dar said that it was a historic day that we regained the status which we had lost after crises in stock market in 2008.He announced that the PML-N government had achieved most of the targets on economic front which had been part of its manifesto and regaining the emerging market status was one of them.
Finance Minister said that the country will say good bye to IMF following the upcoming 12th review by the fund However, he said that we recognize the IMF contribution and assistance towards stabilizing Pakistan’s fiscal position. He proclaimed that the country’s foreign reserves will hopefully reach $22 billion mark by end July.
He said that Pakistan’s macro-economic indicators had been established and the world recognized it. In future, the government will focus on achieving high growth and development. He said that Pakistan’s economy had the potential to reach a very high place in the world.
Ishaq Dar said that politics and economic shouldn’t be coupled together and invited all political parties to join the government in formulating a future economic road map for the country. He said the last three years’ decisions of the government and operation ZarbAzb contributed in improving the country’s repute and confidence of the investors.
Dar said that there were a lot of pending legislations but the SECP had revamped most of its laws to make them up to date. Another major achievement of the SECP in reforming its legal infrastructure would be the introduction of Companies Bill 2016 that will be introduced in the parliament in near future, he added.
SECP CHAIRMAN LAUDS ‘LANDMARK ACHIEVEMENT’:
The SECP Chairman Zafar Hijazi said that it was a landmark achievement and he appreciated the people from SECP and PSX who worked hard to attain the status. However, he said, the status will come with more responsibilities and will require the regulator to become more vigilant and careful. He cautioned that the SECP will be more attentive and stringent to maintain discipline in market and confidence of investors.
The Chairman SECP said that the next challenge ahead was the divestment of stock exchange. He said that they had constituted a committee comprising of all stakeholders to search for an effective strategic investor for PSX. He hoped that PSX will be able to attract global strategic investors and financial institutions and form technological partnerships to fulfill the objectives of integration and become a major regional investment hub.
Counting the factors which contributed in achieving the status of emerging markets, Zafar Hijazi said that the recommendations made in Shamim Ahmed Khan’s report on Stock Exchange crises of 2008 helped SECP to overcome the flaws in the system. He said the SECP made the 2008 crisis report public despite opposition which restored the confidence of investors in the market.
He said the SECP also made significant improvements on implementing the principles of International Organization of Securities Commission (IOSCO). He expressed the hope that Pakistan would achieve up to 80 per cent compliance with the IOSCO principles from the existing level of 62 per cent. Before last year’s assessment, Pakistan’s implementation level to IOSCO’s principles was merely 34 per cent. Enhanced compliance with international standards helped Pakistan in graduating to MSCI Emerging Markets Index, he added.
Hijazi said the second major factor which contributed in attaining this status was SECP’s continued focus on strengthening its regulatory framework through introduction of structural and legal reforms. “Our reforms agenda aimed at market development, ensuring investors’ protection, increasing investor base and creating an enabling environment for businesses,” he said. The third major factor that cleared the path to MSCI index was the successful integration of three stock exchanges, he said and added that now the critics of integration admit that the merger had improved the investors’ confidence and strengthened the market.
The Pakistan Stock Exchange (PSX) Board of Directors Chairman Dr Muneer Kamal said that the market stakeholders were confident that Pakistan would regain the emerging market status that was the reason why the market index had been rising lately. He said that during the recent PSX’s road shows in London, New York and Hong Kong big fund managers from all over the world were briefed on recent reforms in the capital market as well as on economic turnaround in Pakistan. The MSCI and the fund managers greatly appreciated Pakistan’s economic reforms and improvement in country’s capital market and that had improved the likelihood of Pakistan’s capital market being included in the MSC’s emerging market index, he added.
Muneer Kamal said the world had now recognized that the Pakistani economy was stable and offered excellent opportunities for investment. He said the government, the regulator and the stock exchange was on the same page and working to attain the same agenda.
Speaking at the occasion, Minister of State for Privatization Muhammad Zubair said that the story of Pakistan’s economy was a great story to attract investors. He highlighted the positive achievements of the government and said that the PSX was one of the fastest growing stock exchanges and subsequently an important indicator of economic growth.