Pakistan’s stock market is perhaps the only sector of the economy which has expanded in the last four years or so in an otherwise struggling economy. Though the market has been on an upward trajectory since 2002, it has accelerated at a really fast pace in the last few years, with 2017 being an exception, where the market suffered losses in the last few months thanks to the political situation in the country.
In my view, the market would continue to perform well in 2018, and it should be a positive year for the equities sector as a whole. There are a number of reasons for my prediction that the stock market will do well, like a noticeable increase in investment, plus a change of management at the Pakistan Stock Exchange.
If we talk about the last few months of 2017, the heavy losses in the stock market are directly related to the disqualification of former Prime Minister Nawaz Sharif, following which the regulator deliberately tried to bulldoze the interests of the investors, resulting in the sharp decline.
The barriers put in place by the Securities and Exchange Commission of Pakistan (SECP) created a negative air for the investors, which resulted in their losses. It looked as if the SECP was deliberately trying to enforce regulations which were against the investors’ interests, and there is only one explanation as to why the regulator was doing this – Sharif’s disqualification.
Nawaz Sharif was disqualified by the Supreme Court of Pakistan, but his party – the Pakistan Muslim League (Nawaz) – was still in power. Sharif has always tried to take personal credit for all the good that the stock market has done in recent years and so, a downward slide in the market was an attempt to support Sharif’s claim that ‘without him everything is going to go wrong.’ I believe this is not acceptable. I’m sure Sharif himself knew that what he claimed didn’t hold any weight but when those in power start giving out such statements, other state institutions also fall in line to back them which only creates negativity and the loss is for each of us to bear.
I have no doubt in my mind that concrete efforts were made by the government, post-Sharif’s disqualification, to damage the market and many investors suffered losses, whereas those close to the government benefited from the situation.
However, the irony here is that anywhere else in the world if such efforts to deliberately damage the market are made, high-level inquiries are done and those responsible are handed tough punishments. But to expect such a thing to happen in Pakistan would be hoping for a miracle. I am convinced that there was a deliberate attempt to damage the market and it is evident from the fact that a discussion in the National Assembly on the matter has been delayed twice. To delay discussion on such an important issue, that too twice, clearly indicates that something is not right. I believe if the National Assembly’s committee on finance takes up this matter, it should ensure that it reaches a logical conclusion. Nothing could be as depressing as the regulator itself trying to damage the market.
And now that the regulator has changed its behaviour in the past few weeks, it won’t be wrong to say that the market was disturbed to further the personal interests of a few. Nothing is beneficial for the business more than the regulator making things easier for investors and brokers. This doesn’t mean that those who turn to illegal means to gain profits should be pardoned. The regulator should continue to enforce its policies in a transparent manner.
Looking back, our equity market has continued to do well since 2002. There are many groups who started small and have now recorded massive growth over the years. They have worked really hard and their growth in the sector has benefited the country’s economy. The groups that have performed outstandingly well over the years include Hussain Dawood, Mian Mansha, Mohammad Ali Tabba, Arif Habib, Ghandhara Group, Sapphire Group, and Liberty Group among others. They have done well in the equity market and are considered as market leaders.
Some of the groups’ market capitalisation has now crossed the billion-dollar mark. It is a good sign for the market that our industrialists are recording continuing progress. Their continued progress will translate into continued investments which will keep on creating jobs.
However, the fact that the government doesn’t have much representation from the industry in their policymaking process is not friendly. What happens in such a scenario is that those few looking after their personal interests manipulate the proceedings which results in investor-unfriendly policies getting approved. I urge the government that, whatever time they have left now, they should use to take corrective measures with respect to their policies, wherever required. Moreover, it should ensure merit. Promoting corrupt individuals can never bring any good to anyone.
The government should also turn its attention to resolving peoples’ needs: education, health, and water. If we manage to fix these things for the people then I’m optimistic that other issues will also fall in line. The good thing about the China-Pakistan Economic Corridor (CPEC) is that it will take care of our infrastructural woes as the project is bound to attract investment in the sector.
Keeping in view the challenging times we live in, we need to set our differences aside and come together. We have many enemies and we cannot fight them until and unless we stand united. Those in the government and in the opposition should put the country first, before their interests. I may have a hundred grievances with the government, but when it comes to our national interest, we all should stand united irrespective of who’s in power. We created this country after sacrificing so many lives. We shouldn’t let the sacrifices of our ancestors go in vain. I will admit that the present situation is not at all ideal but someone will have to take the first step and show the nation the right direction. I believe we should stop waiting for someone to come and do it for us. Instead, we should all take it upon ourselves to play our role.