KARACHI: Pakistan is in talks with the International Finance Corporation (IFC) for launching rupee-denominated sovereign bonds worth $1 billion, which would be focused on non-resident Pakistanis, Prime Minister Nawaz Sharif told an interactive session with the board of directors and senior members at the Karachi Stock Exchange on Friday.

Another major announcement made by Finance Minister Ishaq Dar was the government decision to reduce export refinance rate from 7.5 to 6pc from Feb 1.

The surprise visit of the prime minister with a large entourage of the finance minister, the governor of Sindh, the SBP governor and representatives of Muttahidda Qaumi Movement (MQM) and Pakistan Peoples Party (PPP) brought jubilation at the market.

The PM praised the record rise in the KSE index from 19,916 at the time of his party taking reins of power to current 34,606 points and stressed that the capital market was a barometer of the economy.

He expressed confidence that the energy crisis would be eliminated from the country.

The PM told the gathering that a ‘Pakistan Development Fund’ was being contemplated which was targeted at infrastructure development in which the World Bank and IFC had shown their interest. It would be the endeavour to channelise domestic savings towards the Fund, he said.

A senior member present at the meeting stated that a significant development was the suggestion by the MQM representatives of devising a ‘charter of economy’, which should be a long-term economic document to be framed by consensus among political parties so as to assure the continuation of economic policies even with the change of governments.

Cut in export refinance rate from Feb 1

The board of directors and senior members of the exchange also discussed specific issues related to the capital market development with the PM and Finance Minister Ishaq Dar.

It was pointed out that the decrease of 1pc in corporate tax stipulated in the Finance Bill was just for one year and in case it was not addressed next year, the tax would revert back to 35pc from current 33pc which was an anomaly in the law that was required to be removed.

The bourse representatives also highlighted the adverse implications of withholding tax at 5pc levied on bonus shares as corporates had halted bonus issues which was a loss for investors.

A senior member also informed about the recently launched first Real Estate Investment Treaty and suggested measures for development of the real estate which he thought would add significantly to the GDP growth.

He recommended amendments in mortgage foreclosure laws for the development of Real Estate Investment Treaty.

The finance minister told the KSE board that the government wanted to ease individual taxpayers’ economic activities by replacing the need for National Tax Number (NTN) at every stage with just the Computerised National Identity Card (CNIC) number.

Published in Dawn January 31st, 2015

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