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SECP & KSE Updates

SECP KSE UPDATE Securities and Exchange

431 replies to this topic

#1
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    SECP advice regarding risk management regime
    RECORDER REPORT

    ISLAMABAD (August 23 2007): The Securities and Exchange Commission of Pakistan (SECP) has informed the investors that any change in risk management regime at the stock exchanges would be implemented with prior 30 days' notice to the market with another 30 days to unravel the positions that any investor might have taken.

    The Securities and Exchange Commission of Pakistan (SECP) on Wednesday said that the Commission had revised the margins on Continuous Funding System (CFS) and the risk management systems as part of the total revamping of CFS regime.

    There have been discussions and speculation in the electronic and print media associating the recent fall in the stock market to the Securities and Exchange Commission of Pakistan (SECP) decision requiring 50 percent of 'Value at Risk' (VAR) margin as cash margin on trades in the CFS.

    It is clarified for the investing public that margins on CFS and the risk management systems are being revised as part of the total revamping of CFS regime which will merge with CFS MK-II on its implementation, the SECP said.

    The facts are that a proposal was submitted by the Karachi Stock Exchange (KSE) to SECP requesting limited uncapping of Continuous Funding System (CFS) financing limit.

    The Securities and Exchange Commission of Pakistan (SECP) analysed the proposal and advised the Exchange to strengthen the criteria for selection of CFS eligible scrips and to further strengthen its risk management measures to enable the SECP to remove all limits on CFS financing thus making it market based.

    KSE Board of Directors reviewed the SECP suggestions and desired to discuss the matter with the Commission. Accordingly, a meeting was held between SECP and KSE last Friday wherein the issue was discussed in detail. The matter is currently under consideration at the Securities and Exchange Commission of Pakistan (SECP) and work is in progress.

    The investing public is advised that any change in risk management regime at the stock exchanges would be implemented with prior 30 days notice to the market plus another 30 days to unravel the positions that any investor might have taken.

    As per current practice, the Securities and Exchange Commission of Pakistan (SECP) takes all decisions after due discussion and deliberations with the stakeholders, the Commission added.

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    #2
    AbDuLmAtEeNkHaN

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    CFS rate falls to two-year low

    AHMED MALIK
    KARACHI (August 24 2007): The continuous funding system (CFS) rate significantly declined by 41bps and stood at its two-year low level of 10.6 percent on Thursday as compared to 11.1 percent a day earlier. On the other hand, the total CFS investment also declined and stood at its five-month low level of Rs 46.75 billion against Rs 49.72 billion registered on Wednesday.

    "The significant decline in CFS rates shows that the market participants avoided to take fresh position", a leading analyst said. Prevailing political uncertainty in the country, declining oil prices in the international market and massive outflow of portfolio investment from the country's equity market were some of the main reasons for this decline, he added.

    Karachi share market remained under selling pressure during the last few weeks and the benchmark KSE-100 index has lost over 2200 points from its all time high level of 14,202.23 points recorded on July 13. The KSE-100 index closed at 12,001.76 on Thursday (August 23).

    The overall market capitalisation also declined by Rs 688 billion from Rs 4.203 trillion on July 13 to Rs 3.515 trillion on Thursday. The massive outflow of portfolio investment from the country's equity market continued during this period as the foreign investors opted to offload their holdings on available margins. The total outflow of portfolio investment reached 194 million dollars in the current fiscal year (from July 1 to August 22).

    Earlier on June 4 this year the total investment under Continuous Funding System had crossed its upper limit of Rs 55 billion and finally settled at its highest-ever level of Rs 55.015 billion.

    The brokers were demanding the SECP to enhance the upper cap of this mode of financing to a new limit of Rs 75 billion, however, the Securities and Exchange Commission of Pakistan refused this proposal.

    The SECP chairman said that the upper limit of CFS funding would be at the present level of Rs 55 billion and that the regulator wanted to minimise the risk factor. Recently the SECP has approved lifting of CFS upper cap of Rs 55 billion subject to implementation of certain conditions. The SECP will serve one month's notice after its approval before implementation.

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    CFS Mk-II to be implemented at KSE next month

    RECORDER REPORT
    KARACHI (August 24 2007): Securities and Exchange Commission of Pakistan (SECP) Chairman Razi-ur-Rehman has said that the CFS Mk-II will be implemented at the Karachi Stock Exchange by the end of September.

    Talking to media after a ceremony held by Pakistan Institute of Corporate Governance (PIGC) here on Thursday, the SECP Chairman said that all necessary work had been completed and its implementation at KSE would be done by the end of next month.

    He said that the new categories schedule for continuous funding system (CFS) would be approved soon and one-month notices would be served after its approval.

    Regarding dematualisation of KSE, he said that the work was in final phase and it was expected that the dematuliasation of KSE would be completed by October.

    "The KSE members would own 40 percent share of the market, while the remaining 60 percent would be sold to strategic investors, financial institutions and general public", he said, and added that the voting power of stock members would reduced after its dematualisation as 40 percent directors would be taken from members side, while 60 percent directors would be nominated by the SECP.

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    Wali Oil Mills delisted

    RECORDER REPORT
    LAHORE (August 24 2007): Pursuant to an application for voluntary delisting by Wali Oil Mills Ltd, the Lahore Stock Exchange (LSE) has decided to delist the company from ready board quotations of the exchange from September 20, 2007.

    The majority share holders of Wali Oil Mills Ltd, have applied for delisting of the company through buy-back of shares from the minority shareholders and an extraordinary general meeting of the company on May 22, 2007 approved the buy-back price of Rs 40/- per share fixed by the exchange, a notification issued by LSE said. The share holders of the company who want to avail the opportunity are advised to approach the purchase agent MTM Securities (Pvt) Ltd at LSE building the notification added.


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    Govt mulls to float IPOs of PSM, SIH

    HAQ NAWAZ
    ISLAMABAD - After getting more than the expected results, the government is planning to float the Initial Public Offering of Pakistan Steel Mills (PSM), Services International Hotel (SIH), Republic Motors and Hazara Phosphate and Fertilizers Limited in stock markets under the government programme for the people.

    "As remarkably successful Global Depository Receipts (GDRs) of Oil & Gas Development Company Limited (OGDCL), United Bank Limited (UBL) and the largest ever Initial Public Offering of Habib Bank Limited (HBL), the government is keen to maintain the momentum to broaden the base of capital markets," Minister for Privatisation and Investment Zahid Hamid stated this while chairing a meeting of the Privatisation Commission (PC) Board here on Thursday.

    The meeting also reviewed the progress and status of various ongoing and upcoming transactions including Initial Public Offering (IPO) of Pakistan Steel Mills Corporation (PSMC), Services International Hotel, Republic Motors and Hazara Phosphate & Fertilizers Limited.

    The PC Board was informed that the successful completion of the HBL IPO represents yet another milestone achieved by the Privatisation Commission. The HBL IPO is the largest offering ever in Pakistan in terms of both value and number of successful applicants.

    "Total subscription of Rs 18.94 billion has been received against a base offer of Rs 8.11 billion (excluding Greenshoe Option). The HBL-IPO consisted of a 5 % offer (34.5 million shares) with an additional Greenshoe Option of 2.5% (17.25 million shares)," the meeting was told.

    Keeping the objectives of the Government's "Privatisation for the People" program, the shares were offered for the first time in lots of 100 and multiples of 100 up to 500 shares and thereafter multiples of 500 shares. This made the subscription affordable for the common man. The subscription of HBL shares commenced on July 26, 2007 and closed on July 31, 2007.

    The PC Board constituted a pre-qualification committee for the privatisation of 26 PTDC's motels and restaurants, which received encouraging response from 37 parties.

    Earlier, the PC Board condoled the tragic death of its Secretary Arif Mansur and his wife. The participants offered 'fateha' for the departed souls and lauded the services rendered by late Mr. Arif Mansur stating him as a hardworking, intelligent, devoted, honest and outstanding civil servant.

    Members of the Board of the Privatisation Commission, senior officials of the respective ministries and departments attended the meeting.

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    Regards,
    Abdul Mateen Khan

    #3
    MJI

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    Take care yourself

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    #4
    Nomi929

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    waisay bhai iss mein Surrender karnay wali kia baat hai aur new topic ki bhi koi zaroorat nahi thi.


    Best Regards,

    Nouman Tariq.

    #5
    mavirk

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    :yawnstretch:

    View PostNomi929, on Aug 24 2007, 03:36 PM, said:

    waisay bhai iss mein Surrender karnay wali kia baat hai aur new topic ki bhi koi zaroorat nahi thi.


    #6
    AbDuLmAtEeNkHaN

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    KSE demutualization body sends letter to Musharraf

    IRFAN MALIK
    KARACHI - Karachi Demutualization Committee submitted a letter to the President Pervaiz Musharraf to consider their point of view before signing the demutualization ordinance of stock exchanges compiled by Securities exchange of Pakistan (SECP), it was learnt.
    The decision to this effect was taken in a meeting of Karachi Demutualization Committee, which consists of board of directors of KSE and core brokers, presided over by the KSE Director Shahzad Chamdia.

    The members of Karachi Demutualization Committee observed in the meeting that SECP had not included a single condition of MoU that was signed by SECP and KSE in the year 2006, while the chairman of SECP in several events assured the members of KSE to consider their point of view before sending the ordinance to President Musharraf for final approval, the sources said.

    The prime concern of the Karachi demutualization Committee was to protect their fundamental rights, which were at risk after introducing the new demutualization ordinance compiled by SECP. Around 100 members who attended the meeting vowed to leave no stone unturned to protect their rights even if they had to knock the doors of court for acquiring their rights and they were also consulting their lawyers in this regard, the sources said.

    Sources said that SECP had not taken the stakeholders into confidence before submitting the ordinance to the President for its approval.
    The committee was suspicious about the new draft of ordinance either it was compiled by SECP or Ministry of Law and alleged that chairman SECP sent the new draft of to the president for its approval before the meeting which he had called on upcoming Friday to discuss the issues which conflicts the interest of stake holders of KSE, sources mentioned. The meeting decided that their all reservations should be addressed before approving the ordinance.

    Sources said that members in meeting cited the demutualization of Indian, Australian and other countries stock markets where the draft of demutualization was compiled with the consent of members of said stock markets, but in Pakistan the stock market members totally neglected, even no consultation has been made to the members of KSE in this regard.

    Members also cited that International and particular Asian experience of demutualization has demonstrated that after demutualization, the market capitalization, turn over, and products and services offered by exchanges have greatly increased in the benefit of all stake holders, brokers and benefited from demutualization through higher commission earned on increased trading volumes, by capital gains on the shares, which they received on demutualization.
    The committee members alleged that in our country the draft was compiled without the consent of members of KSE. They showed deep concern over the clauses of price evaluation and inclusion of strict penalties for those who do not follow the rules set in new draft of demutualization. Referring one of the clauses that house would be seized of those who violated the rules and regulations set in new draft.

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