In Karachi, Caretaker Finance Minister Dr. Shamshad Akhtar emphasized the need to move away from the practice of conducting business through bank loans.
Speaking at the IPO Summit 2024 aimed at strengthening the future of the capital market under the Pakistan Stock Exchange, Dr. Akhtar highlighted the reforms introduced in the stock market and projected a growth rate of over 5% in agricultural development and over 2% in industrial growth for the current financial year. However, he cautioned that high-interest rates might impact the performance of capital markets.
Dr. Akhtar acknowledged improvements in economic growth, with a rate of 2 to 2.5 percent and a surplus in the current account. He mentioned an increase in State Bank reserves to $9.10 billion from the second IMF installment, laying the foundation for foreign investment. Despite global inflation, he urged a shift away from the debt financing mindset and emphasized examining capital market transparency, issuers, and investors.
Highlighting a 10 trillion rupees target from FBR structuring, Dr. Akhtar stated that efforts to restore confidence in the economy were yielding results. However, he stressed the importance of addressing interest rates, projecting government revenue of 10 thousand billion rupees. To thrive, he asserted the capital market must move beyond reliance on bank loans, calling for increased stock market capital. He noted a significant gap in IPOs, with only one in 2023, emphasizing the need to expand the investor base from the current 2 lakh investors.
Dr. Akhtar welcomed the reduction in Tbills yield below the policy rate and acknowledged State Bank officials advocating for lower interest rates, linking it to inflation rates. Earlier in the summit, Chief Executive PSX Farrukh H Khan highlighted the vital role of the capital market in economic development, encouraging companies to connect with it for growth. Chairman SECP Akif Saeed, through a video link, reiterated that the capital market serves as the engine of economic development, with SECP playing a crucial role in guiding companies and facilitating their improvement.