KARACHI: Regulators have continued to believe that the existing three stock exchanges in Karachi, Lahore and Islamabad are already a crowd. Applications for setting up exchanges at Multan, Faisalabad, Peshawar and Quetta were turned down a year or two ago. Considering that the stock exchange at Islamabad is just a shadow of the KSE in terms of daily trade, a stock exchange in Quetta would perhaps mean that stock brokers would stand outside the gates to grab any passing man, suspecting him to be a potential client. “The savings and investment dynamics are altogether different from those in Karachi,” says one port city stock broker.
The recent debacle at the KSE shows that even at a place where so much information and research is available, investors were trapped in overstretched position, an uninformed Baloch investor was likely to lose more money and be more furious than the one in Karachi. And he might decide to make clearing and settlement according to tribal rules!
But it would be wrong to suggest that people from Quetta and other surrounding cities know nothing about investing in stocks. Substantial sum of money comes flowing in the KSE from the province that fuels fire of growth. In order to attract larger and widen investor base, stock brokerage firms could set up sales outlets in major cities as many have done in various parts of the country.
The KSE also runs short of stock market quoted companies from Balochistan. There are only a handful of units belonging to that province, among the 661 companies listed at the KSE. Polyron Limited and Bela Automotives Limited are at Hub Chowki and so is Pak Fibre Industries Limited in Hub Industrial Estate. But all of them are just lame ducks. Quetta Textile Mills, a comparatively better performing unit maintains its head office at Karachi.
The Hub Industrial Estate, includes Hub, Winder, Gadani and Uthal. Most industrialists were lured into setting up units there by offering incentives such as 10 years tax holiday and so on. But when businesses ran out of profit, the wheels of industries came to a grinding halt. Leave aside a branch of a foreign bank, ask any big local industrial group in Karachi if they plan to set up an investment bank; leasing company; life insurance company or a mutual fund and they are likely to shift their gaze and shuffle their feet. Would the greatest reluctance be on setting up a life insurance firm?
