KARACHI, Oct 29: The capital market in FY05 also witnessed a significant rise in the listings of new debt instruments, especially by banks

in the corporate debt market that witnessed a sharp rise in the size of the market that remained relatively subdued in FY04, stated the SBP Annul Report 2004-05.

The report claimed that the renewed interest in corporate debt market was the upshot of SBP’s recent regulation that directed the commercial banks to enhance their paid-up capital and to improve capital adequacy requirements.

The report stated that corporate debt market saw a growth of listings of new debt instruments, reflecting in part, expectations of a rise in interest rates. The period FY05 saw 12 listed debt instruments worth approximately Rs15.5 billion, in contrast to FY04, which witnessed a total of seven listings worth Rs3.3 billion.

Out of the 12 new listing of debt instruments, seven were launched by commercial banks, two by other financial institutions, two by oil and gas companies and one by telecommunication company.

“The issues by banks were aimed principally to increase their Tier II capital to meet the higher capital adequacy ratios required under the SBP prudential regulations”, stated SBP, and added that going forward other banks were also likely to issue TFCs for that purpose.