KARACHI: The Pakistan Stock Exchange (PSX) on Tuesday signed an agreement with the Chinese stock market in Shenzhen to acquire trading and surveillance system for $2.85 million that would help the local bourse connect with the stock markets in Shanghai, Shenzhen and Hong Kong, PSX officials announced on Friday.
“The trading and surveillance system offered by the Shenzhen Stock Exchange [SZSE] is both advanced and robust. The system can also be used for risk management, data dissemination and market control purposes,” PSX Chairman Suleiman S. Mehdi, who signed the document with the chief executive officer of Shenzhen Stock Exchange, Wang Jianjun, told a news conference in Karachi.
“A further additional interface is China Connect which can give PSX access to the other exchanges that SZSE is linked with. These include the markets in Shanghai and Hong Kong. This will open up the Asian market to PSX and Pakistan for business opportunities. Additionally, the improved data quality will compound PSX data vending potential and capability immensely,” Mehdi further elaborated.
It may be recalled that Pakistan sold 40 percent stakes of its local bourse to Chinese investors after merging its three exchanges in January 2016.
PSX Chairman Suleiman S. Mehdi (third from the right) can be seen along with other PSX officials and directors while giving a news briefing in Karachi on Nov. 29, 2019. (AN Photo)
Being a partner exchange, the Shenzhen stock market will provide continuous technical support to PSX after the installation of the system. According to the PSX chairman, the new trading and surveillance mechanism will gradually phase out the existing, locally designed system in about 12 to 14 months.
“In today’s fast changing technological world, a reliable, secure and efficient trading system is a basic requirement for PSX. Furthermore, a robust and state-of-the art surveillance system is also an essential requisite as PSX is the only national exchange and a frontline regulator,” Mehdi said. “The PSX is confident about the quality of the system which is currently used by the Shenzhen Stock Exchange itself without any lapses.”
PSX officials also hope that the system will enable brokers and investors to trade inequities in all the connected exchanges while Pakistan is likely to attract major Chinese investment through equity market.
“For instance a mid-tier investor in Shenzhen told us that his fund would invest $2 billion in Pakistan, provided it got approval from the Chinese authorities,” Mehdi informed.
He also announced that the first Exchange Trading Fund (ETF) would be launched in January, followed by Bond ETF.
Mehdi also confirmed that work on Islamic Future Index was also in process.
