ISLAMABAD, March 12: The reported interest by the Dubai Stock Exchange to take a 40 per cent stake in the Karachi Stock Exchange (KSE) would ultimately prove a good omen for the both.

Under the planned acquisition, members of the Karachi Stock Exchange would become shareholders in the stock market once a key presidential ordinance is signed to allow the change in the ownership provisions. If the deal with the Dubai Stock Exchange is firmed up, the two markets stand to gain.

For the KSE, this would represent not just an expanded ownership by a premier stock exchange, but also the recognition which goes with that change.

For the Dubai stock market, the acquisition helps it establish formal ties with a stock market close to home at a time when the Middle East region as a whole is benefiting from the robust flow of oil money.

For the moment, there are no indications of high petrol prices going into a reverse gear, in spite of clear signs of a global recession.

In fact, oil prices will hold on to their present trends and contribute to the continued flow of revenue to oil producing countries in the Middle East.

With oil prices at an all-time high comes the prospect of a continued flow of revenue to the region surrounding Dubai.

One benefit of the KSE’s tie-up with Dubai would also be the brighter prospect of attracting more Gulf investors to the Pakistani market.

Dubai’s investment in the Karachi Stock Exchange would also bring in much investment inflow for the local equity management and stock brokering community.

Injection of funds at this crucial moment essentially brings investments to perk up the local Pakistani business scene.

But going into the future, a follow-up to this investment will have to be built up by two important measures. These will include encouraging the inflow of world class management and research values at a time when the KSE is in need to modernise further in many ways.—APP