Chinese consortium to increase investment in Pakistan capital market infrastructure

ISLAMABAD: Chinese strategic investors in the Pakistan Stock Exchange (PSX) on June 15 have decided to increase their long-term investment in Pakistan capital market.

The consortium plans to raise its stake in the Central Depository Company (CDC) and the National Clearing Company of Pakistan Limited (NCCPL).

The Securities and Exchange Commission of Pakistan (SECP) has also issued the required approvals, which has removed key regulatory hurdles and opened a new phase of financial cooperation between Pakistan and China.

The development came during a meeting between a high level Chinese delegation and SECP Chairman Dr. Kabir Ahmed Sidhu. The delegation included representatives from the China Financial Futures Exchange (CFFEX), Shanghai Stock Exchange, and Shenzhen Stock Exchange.

Both sides discussed ways to support market growth in Pakistan, attract more investment, and introduce new financial products in the stock market.

The Chinese delegation appreciated SECP for clearing long pending regulatory issues and granting approvals on time.

Due to these approvals, the consortium will now be able to increase its shareholding in CDC and NCCPL, which are key institutions in Pakistan capital market system.

The delegation also supported the decision to transfer PSX property management to a separate company. This new company will operate under a Real Estate Investment Trust (REIT) model. It will handle property matters, while PSX focuses more on its main operations, market development, and new product launches.

The Chinese team was led by Yu Hong, Chief Representative of CFFEX, along with senior officials Lu Fengsen and Zhang Xiaofeng. The meeting also included senior Pakistani officials such as PSX Managing Director and CEO Farrukh Sabzwari.

Pak-China Investment Company managing Director Sing Zhen Wen, and SECP Commissioner Muhammad Ali Farid Khwaja, along with other regulators and exchange representatives.

Yu Hong said China consortium has strong confidence in Pakistan economic future and wants to play a bigger role in strengthening the capital market. The meeting also reviewed plans for cross border exchange Traded Funds (ETFs) between Pakistan and China. A joint working group from both countries is already working on this initiative to improve investor access to both markets.

They also discussed the use of modern trading systems, better settlement technology, improved market monitoring, new financial products, and steps to increase liquidity and investor awareness in the market.

SECP Chairman Dr. Kabir Ahmed Sidhu welcomed the expansion plans of the Chinese consortium. He assured full support from the regulator for market development, technology upgrades, and the launch of new investment products in Pakistan capital market.