KARACHI, Jan 17: The investment banks contribute significantly to the development of national economies in general and financial markets in particular.
This was stated by Federal Minister for Finance, Shaukat Aziz, in his speech read out at the inaugural session of "Investment conference on investment banking: A strategy for prosperity."
The two-day moot was held under the auspices of Institute of Business Administration (IBA), Karachi.
Mr Aziz was due to address the conference but he could not turn up as he was busy in connection with the joint session of the parliament in Islamabad. His speech was read out by Dr. Tariq Hassan, Chairman of the Securities and Exchange Commission of Pakistan (SECP).
The Minister said investment banking acts as engine of economic growth as it promotes industrialization by accelerating capital-raising activities and plays a vital role in bringing foreign investment through mergers and joint ventures with local investors.
Its significance in steering the direction of the economy and achieving the ultimate goal of growth and prosperity can hardly be over-emphasized, he added.
Mr Aziz was of the belief that in view of government's resolve to privatization and renewed commitment for industrialization, investment banking has to play an important role.
He said that while commercial banking activities promote trade and commerce, the investment banking activities help industrialization and assist in allied activities like mergers, acquisitions, BMRs, etc.
"Therefore, in order to achieve a consistent, balanced and sustainable economic growth, the investment and commercial banking activities have to go hand in hand for rapid economic development," the minister remarked.
He was of the view that investment banks can play an important role in restructuring the classified portfolio of the commercial banks and DFIs.
Aziz said that keeping in view growing interest for regional and bilateral cooperation, the government of Pakistan has established various joint ventures with other countries as DFIs for taking up investment banking activities. These DFIs include Pak-Oman Investment Co., Pak-Libya Investment Co., Pak-Kuwait Investment Co., and Saudi-Pak Investment Co.
He stated that the government is also in a process of establishing another joint venture with the Turkish government for promotion of investment banking activities.
The Minister was sure that the recent successful talks between Saarc countries would open up new avenues for investment banking.
In his keynote address, Dr Tariq Hassan, chairman of the Securities and Exchange Commission of Pakistan (SECP) said investment banking is the hub of the wheel of commerce and getting acquainted with such an important pillar of the financial sector is undoubtedly the most important and essential for the students of business administration.
Dr Hassan pointed out that the SECP has been actively involved in new initiatives towards improving transparency and disclosure in financial reporting of companies.
He said that the SECP has played a key role in introduction of the code of corporate governance and that this is the first ever institutional effort of its kind in Pakistan.
The SECP chief said that the code is based on internationally recognized principles and emphasizes openness, transparency and accountability in the affairs of listed companies.
He pointed out that the SECP has adopted a pro-active approach and the regulatees are consulted before any rule, policy making activity is undertaken.
The SECP chief also assured that his organization would be happy to help IBA in its endeavours.
Earlier, the Director of IBA, Danishmand, said that the institution is producing graduates equipped with knowhow and skills to cater to the market requirements.
He also spoke about that future plans of the IBA.-APP