KARACHI, May 29: Bahrain and Pakistan are in talks to explore the possibility of cross-listing of blue chips on the bourses of the two countries.
“We are studying the possibility of cross-listing blue chips,” said a senior official of Bahrain Monetary Agency—the central bank of Bahrain. The deputy governor of BMA Khalid A. Al- Bassam said here on Thursday that there was enough room for cross listing of blue chips in Bahrain and Pakistan.
Addressing a press conference at State Bank headquarters he said the fact that the Karachi Stock Exchange outperformed all bourses last year was a reflection of the improved economy of Pakistan.
The BMA official is heading a four-member delegation that has come here to see how Pakistan and Bahrain can enhance cooperation in their financial sectors. The delegation had meetings with SBP officials as well as with the chairman of Securities & Exchange Commission of Pakistan Mr. Abdul Rehman Qureshi and the officials of KSE. The delegation also met representatives from leasing/ modarabas and insurance sectors and discussed with them the areas where the two sides could benefit from each other’s experiences.
The SBP deputy governor, Mr. Tawfiq Husain, said while introducing his BMA counterpart to newsman said that BMA can help SBP develop some instruments for Islamic banking including an Islamic version of treasury bills. He said SBP had already worked on Islamic T-bills or Sukuk-al-Ijarah to help Islamic commercial banks in Pakistan keep their statutory liquid reserves in them and use them for inter-bank transactions.
His counterpart in BMA Mr. Al-Bassam said the SBP could help BMA improve upon its banking supervision and inspection systems. He said BMA could also learn better human resource development and management from the SBP.
A press release issued by the SBP said the SBP and the BMA had identified five key areas for immediate cooperation. These include (i) Islamic banking (ii) leasing (iii) insurance (iv) capital markets and (v) human resource development. It said BMA is the first central bank to structure and issue Islamic asset-backed securities—both short term and medium term sukuk; sukuk al-salam and sukuk al-ijarah. “The BMA and the SBP will be cooperating in developing a similar system in Pakistan,” the release said.
KSE Managing Director Moin M. Fudda said when reached by Dawn over telephone that both Pakistan and Bahrain would have to sort out certain regulatory issues before they start cross listing of blue chips on the bourses of the two countries. “It will take time,” he remarked when asked how soon he expected this exercise would be over. He said not only the regulatory authorities of the two countries would have to clear the way for cross listing but the companies whose shares would be listed on the bourses of the two countries would also have to give approval for this purpose.
A KSE press release said that the BMA delegation visited the Karachi Stock Exchange and was briefed about the major changes in the regulatory reforms; emphasis on investors protection and transparency of the system.
It said the delegation extended invitation to the KSE MD to visit Bahrain with his colleagues. The delegation also talked about the possibilities of Bahrain stock market and KSE collaborating in developing the markets. The leader of the delegation Mr. Al- Bassam observed that a nine per cent dividend yield at KSE is the highest available anywhere “and the sole attraction of dividends apart from other gains would ensure continuity of growth.”
LEASING: The BMA deputy governor said he and his colleagues were particularly impressed by the performance of leasing companies here adding that Bahrain wanted to benefit from Pakistan’s experience in this area. During the meeting between the BMA delegation and representatives of Leasing Association of Pakistan and Modarabas Association of Pakistan, the two sides explored the possibility of cross-border business. Vice chairman of LAP Basheer A. Chowdry told Dawn that the two sides also discussed how investment could be attracted from Bahrain into Pakistan.