PSX all set to launch new trading system this month

Author: Daily Times Monitor

The Pakistan Stock Exchange (PSX) is all set to make a newly acquired trading platform – which has been bought from Shenzhen Stock Exchange (SZSE) – fully operational this month, PSX chief executive Farrukh H Khan told Arab News.

The SZSE – the third-largest stock market in the world in terms of trading value – holds a 40% stake in the PSX and is one of China’s three stock exchanges. Pakistan had signed a $5 million contract in November 2019 with SZSE to acquire the trading and surveillance system to improve its operational and technological level.

According to Arab News, the CEO said that the launch is expected within the month of October. Initially, it was scheduled to be introduced in March but there were certain requirements that “our stakeholders had requested to accommodate in the trading system which now has been implemented”, he said.

The new trading system will make trading at PSX more transparent and attractive, bringing the stock market on par with international stock exchanges.

“The system will vastly improve the capabilities of our trading and abilities to introduce new products like options,” Khan said.

“We will have a proper surveillance system and the robustness of the much better system.”

While speaking to the international publication, the CEO said that the downgrading by Morgan Stanley Capital International (MSCI) of the Pakistan Indexes was because of the size of the market capitalisation which has declined.

It is pertinent to mention here that in September the MSCI reclassified the MSCI Pakistan Indexes from its Emerging Market Index (EMI) to Frontier Markets Index (FMI).

In 2017, the benchmark KSE-100 had surpassed the 53,000-point mark with market capitalisation worth $100 billion. However, market capitalisation has dropped over the years to $45 billion including a 17% decline in the last four months.

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 the equity market.”