Pakistan Stock Exchange to launch new trading system this month

Stockbrokers monitor share prices at the Pakistan Stock Exchange (PSX) in Karachi, Pakistan, on March 13, 2020. (AFP/File)

• PSX acquired trading and surveillance system from Shenzhen Stock Exchange
• Pakistan stock market’s capitalization has dropped from $100 billion in 2017 to $45 billion

KARACHI: The Pakistan Stock Exchange (PSX) this month is going to launch a new trading system acquired from the Shenzhen Stock Exchange (SZSE), the burse’s chief executive has said.
The SZSE is one of China’s three stock exchanges — along with Shanghai Stock Exchange, and China Financial Futures Exchange — that hold a 40 percent stake in the PSX.
The PSX signed a $5 million contract with SZSE in November 2019 for the acquisition of Trading and Surveillance System to improve its operational and technological level. It was first scheduled to be implemented in March 2021. 
“We expect to launch within the month of October. There were certain requirements that our stakeholders had requested to accommodate in the trading system which now have been implemented,” PSX chief executive Farrukh H. Khan told Arab News earlier this week.
The system is expected to make the PSX more transparent and attractive.
“The system will vastly improve the capabilities of our trading and abilities to introduce new products like options,” Khan said. “We’ll have a proper surveillance system and the robustness of the much better system.” 
The bourse’s benchmark KSE 100 index dropped 25.61 percent in April 2020 and touched the year’s lowest 27,228.80 level. The index recouped some of the losses in later months.
Pakistan’s bourse was declared Asia’s best stock market and the world’s fourth best performing market in 2020 by Market Currents, a New York-based financial markets research firm. 
However, last month Morgan Stanley Capital International (MSCI) downgraded PSX from its Emerging Market Index (EMI) to Frontier Markets Index (FMI), following a continuous drop in share prices of its listed companies.
In 2017, benchmark KSE 100 had peaked to 53,000 points level with market capitalization of $100 billion. However, market capitalization has dropped over the years to $45 billion including 17 percent decline in last four months.
“This (downgrading) was mainly due to the size of the market capitalization which has declined,” Khan said. “Rising oil prices, which doubled in recent days, Afghanistan’s situation, interest rate hike and rupee remained under pressure and MSCI reclassification generally has created negative impacts in equity market.”
“Pakistan’s stock market has given average 19 percent return in dollar terms during last 20 years,” Khan said.
Pakistan’s stock market recorded growth earnings of 60 percent last year. 
This Friday, the PSX KSE 100 closing level was 44,821.53.