LAHORE, Feb 4: Federal Caretaker Minister for Finance Dr Salman Shah says the government plans to procure seven million tonnes of wheat on market rates in the next wheat harvesting season to control shortage of commodity.

He was talking to newsmen at the launch of Real Estate Investment Trusts (REITs) by the Securities Exchange Commission of Pakistan (SECP), here on Monday.

He said that wheat flour price had been reduced substantially in various parts of the country due to measures taken by the government, including control of its movement across the borders.

“Flour is now being sold at the rate of Rs 15 per kg,” he claimed, adding that atta in Pakistan was the cheapest in the world.

“Even countries like India, Afghanistan and Central Asian states are not providing wheat to their citizens on such rates,” he asserted.

Dr Shah said that like other countries of the world, Pakistan too was facing two big challenges of spiralling oil prices and the rising price of food items.

He said that oil prices in Pakistan would be rationalized in the next six months, and expressed the hope that a future decline in oil prices at the global level could help developing countries like Pakistan meet challenges.

Answering a question, the minister said that the government’s reliance on bank borrowing would end within the next two to three years.

SECP chairman Raziur Rehman Khan, in his address, said that the Securities and Exchange Commission of Pakistan was striving to offer regulatory frameworks for new products, and improvement in the existing laws to meet the needs of the growing market.

Talking to newsmen later, he said that Pakistan was the first emerging market to initiate REITs, the objective of which was anchored around the concept to introduce an alternative asset class with the purpose to add depth to the capital market, and provide transparency to the real estate sector.

The current regulations envisage two types of REITs, i.e. developmental and rental. “In developmental REIT, property is constructed and sold, whereas in rental, property is rented and the unit holders receive returns from the rent of the building.”

Responding to a query, he said in Pakistan the minimum estimated benchmark for REIT project would be above Rs5 billion.

To safeguard the interests of unit holders, he said the SECP had specified a trust structure, in which assets were in the name of the trustee, and the REIT management company managed the operators on behalf of the unit holders.

REITs had the potential to become a valuable addition to both the financial markets and the real estate sector in Pakistan, through a bond of unique product features with the benefits of mutual funds and the property market.

“REITs will be a pooled investment vehicle, managed professionally by fund managers,” he observed. —APP