KARACHI, March 27: Dr Tariq Hasan, chairman Securities and Exchange Commission of Pakistan (SECP) said that stock index was a barometer of the economy and share prices reflected performance of corporate sector, political stability or otherwise and government policies.

He was speaking on Saturday at a seminar organized by the Institute of Cost & Management Accountants of Pakistan (ICAP) on the topic: 'KSE-100 Index-current scenario and future trends'. The SECP chairman observed that importance of securities market and its relevance to provide sector development and economic growth was highly acknowledged by the government. It had also allowed securities market to play its assigned role as an institution of capital formation and broad-based share ownership in the country.

Dr Tariq said that other major steps taken in the regard were government' thrust towards privatization, improvement in economic fundamentals and attracting foreign investment. He stated that KSE had been rated as the "Best performing market of the world" in terms of growth and capitalization and added that while maintaining an overall upward trend, it had also shown volatility. "Market has shown a tendency to drop mainly due to high Badla rates and uncertainty regarding interest rates and margin financing and go up and down as a result of geo-political factors", the SECP chief said. He stated that experts representing stock market had recommended valuable suggestions at the seminar, which would help in further strengthening of KSE.

Earlier, Sher Afghan Malik, President ICMAP said that the KSE had emerged as one of the most lucrative investment destinations in the global investment map. He stated that the present market- friendly environment strongly postulated that the stock market managers and SECP should remain cautious and alert to the focus. "Every effort should be made to consolidate the historic gains", said the president ICMAP, adding "the KSE market conditions in the current year had indicated that rampaging bears may create impasses and run-down, out of a minor ripple".

He observed that any major setback in the stock exchange might create unwarranted problems for the domestic and foreign investors and for the best ever investment environment prevailing in the country. He stated that the stock exchanges and the SECP, in particular should control/minimize undue market manipulation, strengthen risk management and remove the risk of sudden withdrawal of massive funds from badla operations. "The existing investment environment in the country, in general, and the stock market in particular, must not be allowed to be sabotaged by the rampaging bears in the future", Mr Afghan concluded.

Presenting his keynote speech, Arif Habib, chairman Karachi Stock Exchange, said that it was a matter of pride for Pakistan, that KSE had been rated as 5th best stock exchange of the world. He said that stock markets facilitate working of a market by bringing opportunities and investors together. In that way they contributed to the development of an economy. "A rise in stock market normally indicates heightened confidence of investors and the availability of several new investment opportunities", said the chairman KSE.

He said that although the current market activity and surge were positive signs, however, the professional management at the exchange was focused towards its prime responsibilities to ensure fair trade practices and monitoring of exposures & capital adequacy. "Experts in global market are emphasising on the importance of regulations, market efficiency, transparency and avoiding depending on extreme capitalism", said the KSE chairman.

Chairman National Investment Trust, Tariq Iqbal Khan, said that the mutual fund industry was playing a vital role in the stock markets contributing significantly in Pakistan's economy.

He stated that NIT was not only the oldest and largest mutual fund in the country but it was also the largest single investor on the KSE, having portfolio of over 500 companies in almost every sector.

NIT nominees sit on the Board of Directors of over 250 listed companies, said the NIT chief.

Aliuddin Ansari, CEO AKD Securities; Shabbir Hamza Khandwala, CEO KASB Securities; Nasim Beg, CEO, Arif Habib Investments, also presented technical papers. Moin M.Fudda, MD KSE, Yasin Lakhani, member KSE and Hanif Jakhura CEO of CDC were among the panelists.