‘Growing debt market crucial to Pakistan’s economic progress’

KARACHI: Growing and dynamic debt market is crucial for the economic progress of Pakistan and it is imperative for all stakeholders of the financial ecosystem to take the country’s debt market to regional and international levels, PSX chief executive officer said on Friday.

Farrukh Khan, chief executive officer of Pakistan Stock Exchange (PSX) said this during a gong ceremony to welcome Bank of Punjab (BOP) onboard as a market maker for conventional and shariah-compliant debt instruments on PSX.

“BOP is one of the first banks to become a market maker on PSX. We welcome this development as this will lead to increased growth and dynamism in the debt market, which is crucial for the economic progress of Pakistan,” Khan said in a statement. “We believe this step will play a significant role towards achieving that end. We are also in discussions with BOP to bring some of their SME [small and medium enterprise] clients to list on the new GEM [growth enterprise market] board. This will also be an important development for Pakistan’s economy, the SME sector and PSX.”

Market makers perform the role of providing liquidity and depth to the market by facilitating investors to buy and sell securities through continuously quoting two way prices – bid and offer prices.

Zafar Masud, CEO of Bank of Punjab said the bank will be the first bank in the Pakistan market making for both conventional and shariah-compliant securities as well as corporate debt instruments at the PSX portal.

“This makes us the first public sector bank offering a bouquet of services in collaboration with PSX,” said Masud. “We see our role expanding beyond a market maker for debt securities. Through this agreement, we are committing to becoming a leading player in development of capital markets in Pakistan by enabling greater investor participation and enabling listing of more debt, equity and non-conventional instruments at PSX.”

“We can partner with PSX in promoting privatisation and listing of public sector projects for example Punjab thermal power and Quaid-e-Azam solar power through the stock exchange. Moreover, we plan to design instruments to bring projects like Kamyab Jawan Program, SME financing project and low cost housing scheme to PSX platform,” he said.

The BOP CEO emphasised the role of the Bank of Punjab in the capital market and economy of Pakistan.

The Bank of Punjab is one of the largest commercial banks in Pakistan serving through a network of 624 branches. Today, BOP stands as one of the biggest banks managing assets in excess of Rs1 trillion and capital adequacy ratio of 17.18 percent.

“The bank is one of the most active and largest socially responsible banks, contributing to economic development and social uplifting through various programs. During the last one year alone, the Bank of Punjab has emerged as the most active participant in various social protection and economic uplift programs. The bank is leading the efforts to provide financing under SBP COVID-19 schemes, promotion of housing finance in Pakistan, SME sector development and promotion of entrepreneurship through Kamyab Jawan Program,” he said.

The bank aims to become one of the most active players in the Pakistani capital markets. State Bank of Pakistan recently awarded BOP the status of primary dealer of government debt securities. The bank is also an authorised dealer of government shariah-compliant securities.