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Pakistan invited to raise money on UK stock market

Business

June 9, 2019

KARACHI: London Stock Exchange has invited cash-strapped Pakistan’s government to jointly explore ways to raise money on the UK capital market and develop financial linkages.

Representatives of the London Stock Exchange in a meeting apprised the Pakistani High Commissioner Nafees Zakaria of the niche areas that can be looked into by the government of Pakistan for developing linkages in financial markets, an official statement from London said on Saturday. “They also exchanged views on identification and launch of key initiatives such as listing with London’s Stock Exchange and issuance of bonds,” the statement added.

Widening fiscal and current account deficits have contributed to a considerable decline in international reserves to levels that would cover less than three months of imports. The financial assistance from Gulf countries and China, as well as an International Monetary Fund program helped partially rebuild confidence, but the World Bank in a latest report said current account and fiscal deficits are projected to diminish only gradually.

The Washington-based lender said Pakistan’s growth to decelerate to 3.4 percent in the current 2018/19 fiscal year and further to 2.7 percent in the next fiscal year. “The slowdown reflects a broad-based weakening of domestic demand amid monetary and fiscal policy tightening designed to address macroeconomic imbalances, particularly large fiscal and current account deficits,”

Foreign inflows from traditional lenders dropped to $5.6 billion in the current fiscal year ending June 30, 2019 from around $10 billion estimated in the budget. In April, the government shelved a plan to net $3 billion through dollar-denominated bonds, fearing tepid appetite in the international market. It rather banked on yaun-denominated panda debt and IMF’s bailout to support the country’s dwindling foreign reserves. But the plan is yet to be materialised.

Zakaria visited the London Stock Exchange office on an invitation. The High Commissioner discussed opportunities for collaboration between the financial stock exchanges of both countries and tapping potential avenues for strengthening cooperation to enhance investment and explore market opportunities.

“The High Commissioner underlined the importance attached to London as a financial centre and its relevance to Pakistan keeping in view the historical linkages and the strength of our 1.5 million strong British Pakistani Diaspora who could play a vital role in deepening these connections even further,” the statement quoted Zakaria as saying. At the end of their meeting, an overview of the stock exchange facility was given to the High Commissioner for demonstrating how the exchange offices operate in London.

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