KARACHI: The government’s immediate steps of ending fuel subsidies and increasing direct taxes are bearing fruits as it saved the country from default, Finance Minister Mifah Ismail said on Friday.
The Pakistan Stock Exchange (PSX) held a gong ceremony to welcome Finance Minister Miftah Ismail who struck the gong to open the trading day.
The finance minister expressed joy on visiting the exchange. “I fully understand the importance of capital markets and the critical role they play in the development of a modern economy. We are committed to addressing all issues that have held back the capital markets in Pakistan and look forward to our discussion on the capital markets and the economy,” he said.
“As an economist, I look at the fundamentals. From a macroeconomic perspective, we have to keep our economy solvent and protect it from default. A few days back, the rupee started appreciating against the dollar. This occurred because we reduced imports, thereby decreasing our foreign exchange outflow,” Ismail added.
Even though this is not the best case scenario in terms of growth, it is far superior to the boom and bust cycles of the past, he said, adding that he personally does not believe in the import substitution model and is in favour of export expansion. “This is where we plan to focus our efforts and we will take this forward for sustained economic growth.”
“Our tax to GDP percentage is very low at 9.2 per cent. We have to do better in order to achieve economic stability but we will undertake reforms in a gradual and orderly fashion in this regard.”
PSX Chairperson Dr Shamshad Akhtar, Securities and Exchange Commission of Pakistan (SECP) Chairman Aamir Khan, PSX Managing Director and Chief Executive Officer Farrukh H Khan, PSX board members, key stakeholders and distinguished guests were also present at the occasion.
PSX Managing Director and Chief Executive Officer Farrukh H Khan said that it is imperative for the growth of Pakistan’s economy to create a conducive environment which will help to attract more companies and investors to the capital markets.
“A broad based capital market helps to achieve important economic and social objectives, including improved savings and investment rates, documentation of the economy, increasing the number of taxpayers and reducing wealth inequality. Hence, developing the capital markets is fully aligned with the government’s stated objectives,” he added.
The capital markets do not ask for any concessions or subsidies, he said. “We only want a level playing field compared to other asset classes and the large informal sector. Please give that to us, along with consistent tax and economic policies.”
PSX Chairperson Dr Shamshad Akhtar informed the finance minister of some of the concerns of the PSX for the betterment of the capital markets and the economy.
“The PSX has formulated a new strategy which will be launched this year. Some key actions will be taken that will pave the way to augment both the supply side through mobilising equity and debt listings and issuances as well as the supply side by increasing outreach to investors,” she said.
A significant aspect is strengthening the governance of not only the exchange itself but also that of the listed companies,” Dr Shamshad added.
“The PSX is a mature exchange and it has offered unbeatable returns. The PSX is not only transforming but also has a good governance structure along with a robust regulatory framework. The most recent accomplishment is the Onsite Joint Inspection that has been put in place which will ease the burden on the brokerage community,” she added.
SECP Chairman Aamir Khan expressed that well-functioning capital markets can immensely contribute to the wellness of the overall economy, corporate sector and investors and for improving savings and investment rates.
The event concluded with a closed door meeting which included the finance minister along with the top management of PSX, SECP, and key stakeholders. In the meeting, matters impacting the capital markets, business, the current economic scenario and challenges thereof were discussed.
[embedpost slug=”targeted-subsidies-for-14-million-deserving-families-miftah-ismail/”]
