As part of its mandate to provide for increased investor protection and nurture a more informed and vigilant investors’ community, the Securities and Exchange Commission of Pakistan (SECP) has approved the waiver of monthly subscription fee for short messaging service (SMS) alert facility provided to investor account holders by the Central Depository Company (CDC). This facility gives investors an added level of convenience by providing account information via cell phones through SMS alerts. Alerts about activities such as transfer of securities, credit of corporate entitlements, pledge transactions, listing/delisting of securities in the Central Depository System etc., are provided. The SMS Alert Facility at CDC complements the Unique Identification Number (UIN) Information System being offered by the National Clearing Company which provides investors with a real-time access to monitor their trading activities executed through their UINs. These reform measures will a...

The Securities and Exchange Commission of Pakistan (SECP) has formulated the draft Public Sector Companies (Corporate Governance) Regulations, 2012 in order to improve the governance framework of Public Sector Companies (PSCs). These draft regulations have principally been based upon the Code of Corporate Governance, which has been customized in the context of PSCs in the light of the OECD’s Guidelines on Corporate Governance of SOEs. PSCs are public sector enterprises, operating in corporate form, which are directly or indirectly owned and controlled by the government, whether federal, provincial or local.. The draft regulations have been placed on the SECP website ( www.secp.gov.pk ) for soliciting the opinion, comments and suggestions from stakeholders and the public. These regulations have been designed in view of the distinct governance challenges faced by the PSCs in Pakistan. T he inefficiency of such companies is choking the economy and draining fiscal r...

As part of its mandate to develop the debt capital market in Pakistan, the Securities and Exchange Commission of Pakistan (SECP) has approved a regulatory framework to facilitate inter-exchange trades in listed term finance certificates (TFCs). A broker-to-broker (BTB) functionality has now been introduced at the Bonds Automated trading System (BATS). Earlier last year, BATS was revamped along the lines of Bloomberg-based E-Bond with various system enhancements aimed at facilitating price discovery in listed debt instruments and price negotiation between market participants in line with international standards. This system, however, was equipped only to support trading between brokers/investors of a stock exchange where such TFCs were listed and did not facilitate inter-exchange trading in TFCs listed on other stock exchanges. The newly approved BTB functionality will enable brokers to settle their inter-exchange trades directly with the National Clearing Company of Paki...

As a part of its mandate to regulate the capital markets and curb unfair market practices , the Securities Market Division of the Securities and Exchange Commission of Pakistan took enforcement actions against the market participants for non-compliance to the regulatory framework during the month of February. An order was passed against ex-fund manager of an asset management company under Section 15 A of the Securities and Exchange Ordinance, 1969. Moreover, a broker of LSE was penalized under Rule 8 of the Brokers and Agents Registration Rules, 2001, for misstatement and failure to provide information to the SECP. Further, show-cause notices were issued to four brokerage houses of LSE under various provisions of the securities laws. In addition, three orders and four warning letters were issued against directors/beneficial owners of listed companies under Section 224 of the Companies Ordinance, 1984, for late filing of returns of beneficial ownership. ...

As part of its mandate to develop the capital market in Pakistan, the SECP has approved regulations governing exchange traded funds (ETFs) for the Karachi Stock Exchange (KSE). The trading in ETFs at the stock exchanges will provide investors with alternative investment avenues while allowing diversified portfolio of securities that track a benchmark index and improve liquidity in the market. Internationally, ETFs are among the fastest growing investment products which due to a growing demand are being customized to cover specific arrays of regions, sectors, stocks, commodities, bonds, futures and other asset classes. The approved regulations will enable the stock exchange to list and regulate trading in ETFs which at their core are portfolios of securities that are traded like individual stocks on an exchange. The regulations broadly cover the listing procedure for ETFs, trading and clearing and settlement of ETF units, disclosure requirements for asset man...

The National Accountability Bureau (NAB), Sindh taking cognisance of misappropriation of funds of investors by some unscrupulous brokers of Karachi Stock Exchange (KSE) has hinted at stringent measures against them and recovering the embezzled amounts. A decision to this affect was unveiled during a meeting held Thursday between the NAB and KSE. The NAB team was headed by NAB DG Maj (r) Shabbir Ahmed and accompanied by his team members, Director Ghulam Farooq, Deputy Director Ahmed Raza Tahir, Consultant Qudsia Kadri and Investigation Officer Rizwan Shah. The KSE team was headed by KSE Chairman Muneer Kamal and accompanied by KSE Managing Director Nadeem Naqvi, KSE Deputy Managing Director Haroon Askari and several other members of the KSE board. The KSE management was apprised that NAB is conducting criminal inquiries against five former brokerage houses and their accused directors on the charges of cheating public at large. These brokerage houses included Eastern Ca...

We preview Kapco's 2QFY12 results (scheduled to be announced on February 15, 2012) and expect the company to report net profit of PKR1,380mn (EPS PKR1.57, down 24% YoY), gross profit of PKR2,663mn (up 4% YoY) and top line of PKR25,596mn (up 85% YoY). We also expect the company to announce cash dividend of PKR3/share. Target Price and Price catalyst ·          June-12 price target: PKR50.5/share on account of DDM based methodology. ·          Catalyst: Rupee devaluation and resolution of circular debt. (Source: Foundation Securities)