Foreign institutions hide clients identity

Posted on 02.24.07 by StockPK Team @ 10:34 am    

Zafar Moti Chief Executive Officer of Zafar Moti Capital Securities in an interview with The News said that foreign institutions have refused to provide Universal Identification Numbers (UINs) of their clients which is a huge discrimination between Pakistani clients and foreign clients.

This attitude should be changed and same treatment should be given to all, Zafar said.

He said it is obligatory for us to provide the complete information of our clients it should be compulsory for the foreign institutions to provide the details of their clients. Zafar minced no words in saying that authorities always are interested in facilitating the foreign investors interests but local investors interests are not catered to.

He maintained that institutional buying is good but there should be check and balance and UIN numbers of foreign institutions should be provided as local clients’ information is available with them.

Regarding retail clients Zafar Moti said their presence in market was very low because of propensity to save is very low at only 12 to 13 percent as compare to India where it is 25 percent.

He emphasized that it was about time that cash settled future products were introduced to motivate retailers to enhance their investment.

The risk management regime should also be implemented to protect the interests of small investors.

He said that the volumes would get better if medium size brokerages are allowed to work efficiently, retail clients are allowed to play their part and cash settle future are allowed to come in.

It is about time that government should take stance about the over leveraging in order to combat any crises.

He said that he doubted that investors would be able to take positions if leveraging would reach Rs55 billion cap.

The regulators should announce their plans before CFS hits Rs55 billion mark. Few days earlier it had crossed Rs52 billion and if the authorities announce the plans later this would cause trouble in the market he added.

He said that this shows that the retail clients are in and it should be made sure that they should not be pushed out again like it was done in year 2005.

He said that the present boom in market would have been achieved last year. “We predicted that in the last quarter of the year 2006 the market would witness a boom but it did not because of too many rules and regulations choking the trading.”

The year 2006 was dull because of the investigations and overnight implementation of the rules and regulations.

Presently good results are coming in market, good news like extension in implementation of capital gain tax and stamp duty. Because of all the positive news the market has shifted in high gear.

It would have been better if the current levels were achieved over a period of four to six months. A vertical flight is always disastrous; ascent of the market must be followed by consolidation breaks. But now that the market has taken that leap in one and a half months it is troubling a lot of people. There are fears of something very disastrous happening like March 2005, but it’s not the similar situation, which was in year 2005, Zafar said.

Unlike local bourses the regional markets performed very well in 2006, he said adding that year 2007 will not be dull.

Currency stability, GDP growth rate, forex reserves and future prospects indicate that the market will perform well and might make new high records. All leading sectors will drive the market like telecommunications, banking, energy, cement, and fertilisers, he opined.

Regarding foreign portfolios in local bourses Zafar Moti said investments would continue to pour in because the foreign investors are aware of the high rate of returns and bright investment opportunities offered in Pakistani bourses. He said that it is possible that “foreign portfolio investment might reach $4.5 or $5 billion this year.”

Source: The News