ISLAMABAD, Jan 22: The federal cabinet on Tuesday approved the much-awaited ordinance for the corporatisation, demutualisation and integration of the country’s three stock exchanges.

The cabinet meeting presided over by Caretaker Prime Minister Mohammedmian Soomro also approved the signing of five international conventions regarding social, economic and political rights.

The Stock Exchange Ordinance will ensure that all the stock exchanges will be corporatised and effectively demutualised within 110 days of the promulgation of the ordinance. After demutualisation 60 per cent of the directors and the chairman of the board of any stock exchange shall be independent members.

The Demutualisation Ordinance has been finalised after detailed consultations with all the stakeholders and members of the stock exchanges. Eventually, the shareholding structure of the bourses shall be 40 per cent of the existing members, 20 per cent with the general public and 40 per cent with the foreign strategic investors or local financial institutions.

As a result of the new ordinance the stock exchanges may be listed on the local market. Considerable benefits of the demutualisation will accrue with the implementation of this ordinance. The stock exchange management will be free of undue influence from the member brokers. Foreign strategic investors will be attracted and considerable inflow of foreign direct investment (FDI) is expected.

Analysts said with the introduction of independent management, the perception of the local market will improve, which will attract fresh investment in our bourses. With the passage of the ordinance Pakistan will become part of the global trade and ownership and the trading rights will be segregated, they said.

Meanwhile, the cabinet while reviewing PIA’s financial and operational performance, including the ongoing financial stringencies, expressed concern on accumulated financial losses. The cabinet also directed the PIA management to take quicker steps focusing on financial turnaround.

The cabinet appreciated the PIA’s fleet renewal plan by completing induction of 15 new aircraft comprising eight Boeing 777 and seven ATRs 42-500. The cabinet further appreciated PIA’s ongoing plan for induction of seven new Airbus A320-200 aircraft through external leasing arrangements.

The chairman PIA apprised the cabinet about the issues affecting the airline performance, the actions taken to rectify the situation and a comprehensive action plan for the future improvement.

President Damages Assessment Commission U.A.G. Isani presented the report of the National Commission on Damages occurred over a very vast area, including roads and highways and even in remote areas.

Mr. Isani mentioned that the committees had been formed in each district to assess and verify the claims. The government would take action against any false claim under the law. The commission hopes to complete the exercise and give its recommendations by February 10, 2008.