KARACHI: Bourses may not immediately benefit from the post-textile quota era to be effective by January 2005, as they are largely linked with the performance of the export sector.
But stock market sources hopeful of cross-border listing and foreign investment in local shares, especially after the election of Moin M.Fudda, managing director of the KSE, as the chief of Euro bourses, having in its fold over three dozen member countries. There could be a major breakthrough on this front during the next couple of years, they said.
It may now appears to be a remote possibility for the time being, but a lot of foreign investment could come from the western world after the quota regime comes out of its teething problems, brokers predict adding "already being best performing market in the world, the KSE could be an attractive investment bait in the years to come."
All eyes are now focused on the textile and agri-based corporate sector and listed companies on the local bourses; how they face the challenges of the quota-free trade and clinch their share in a highly competitive world market, some leading stock analysts said.
Although opinions are divided among the leading textile producers about negative fallout of the quota-free regime, those who believe in aggressive salesmanship vow to match the Chinese performance because of cheaper lint and a good crop. Some others said "it is a blessing in disguise, which could lead to lower production costs at least for the initial post-quota trading year."
But leading textile tycoons are optimistic about their performance on the world markets as is well-reflected in about 20 per cent increase in the textile exports during the current year.
"Massive expansion and modernization programme, costing about $6 billion, carried out during the last couple of years by the textile sector essentially aims at meeting the challenges of the WTO," claims a top Aptma executive. "Extensive local research work is attuned to cater to the needs of changing consumer taste for the textiles the world over."
Agri-based industries also stand a chance to clinch their market share having a number of primary commodities at their disposal in the form of raw material, which gives them an edge over their world competitors of an identical line of products, including dairy, fruit and some others.
