KARACHI: The total number of investors in the country’s stock market currently stands at around 230,000.

The splendid returns of the Pakistan capital market — 49 per cent in 2012 and 2013 and 27pc last year — the highest returns provided by any asset class and the booming market that has shot stock prices through the roof, may have added to the number of billionaires in the country, but the fruits are not being widely shared.

The number of investors in the market determined by the Universal Identification Numbers (UIN) at the end of December stood at 230,000. Simply defined the system of UIN introduced in August 2006 puts a bar on passing of an order for sale/purchase without a UIN.

“The Number is assigned to each account holder by the National Clearing System (NCS), through the stock broker with its underlying document for the issuance being the National Identity Card (NIC),” a stock broker said.

A source familiar with the situation said that out of the UIN holders, the actual number of investors engaged in trading at the market is even less.

“From July 1, 2014 to Jan 1, 2015 the number of UIN holders who submitted the Capital Value Tax (CVT) statements stood at just around 100,000,” said the broker.

Compared with that the number of equity investors in the neighbouring Iran stands at a mammoth 40 million and in China 100m.

“The reason for a healthy number of investors in the Iranian equity market can also be attributed to the issue of $100m worth stocks of the state-owned enterprises to the public,” said a person familiar with global markets. He added that in Turkey every person who opens a bank account is automatically linked to the equity market.

“The number of new UIN accounts opened in the CY2014 stood at 28,000,” says Muhammad Lukman, CEO at the National Clearing Company of Pakistan Limited (NCCPL).

He observed that the KSE and NCCPL were striving to create awareness about the Pakistan capital markets.

“NCCPL has recently launched a national custodial services to facilitate investors’ participation in the capital markets,” said Lukman.

The KSE also attributes the jump in UINs to the ‘nationwide investor education programme’.

A spokesman for the KSE said that the ‘Investor Awareness Seminars’ were held in Karachi, Lahore, Hyderabad, Badin, Faisalabad and Mithi. The stock exchange officials acknowledge the role of Securities and Exchange Commission of Pakistan; the Central Depository Company of Pakistan; the National Clearing Company of Pakistan and Pakistan Mercantile Exchange “as well as leading brokerage houses and asset management companies (AMCs) that supported and sponsored the country’s most effective and consistent investor awareness generation campaign”.

The KSE released a ‘schedule of events for this calendar year’, which it said was aimed at ensuring transparency and providing level playing field for all market participants.

The KSE invited brokers, AMCs, investor relations function departments of listed companies and other financial institutions to participate in the programme ‘on a first come first served basis’. The bourse uncovered the set of programme allocations for 2015, which provide the structure of investor awareness programme and the role and benefits to the sponsors.

Published in Dawn, January 18th, 2015

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