- Present political gimmickry is gruesome for investors
Interview with Mr Sanie Khan — Independent Capital Market Expert
Mr Sanie Khan has worked as Chief Executive Officer of many organizations and has extensive knowledge and capital to develop and grow the business from the scratch. He was the General Manager at the Pakistan Stock Exchange (PSX) for 22 years. He along with senior members of Exchange successfully negotiated Pakistan’s first ever Risk Management reforms with the Apex Regulator and implemented Client-Level Margining and VaR Risk Metrics at the Pakistani Capital Markets. Apart from designing and developing Pakistan’s first ever Islamic Benchmark Index, Exchange Traded Funds, Cash Settled Futures, he was a co-opted members of the decision-making group that recommended and got concluded the “Deliverable Future and Badla” from the Pakistani Capital Markets, which was reintroduced at a later stage.
Sanie Khan is presently based out in Karachi, and is associated with Softech System, as Director Business. Softech is one of the leaders in Pakistani Fintech space which holds 70% market share of Asset Management Industry having 22 years track-record of success, 125 big corporates client in over three continents, and variety of solutions for Capital Markets, Healthcare Sector and Ecommerce.
PAGE: Could you tell me about the investment in the real estate in Pakistan?
Sanie Khan: The investment in real estate sector is going to remain subsided for about two years, as gains are hovering near profit-taking points. Nonetheless, the present financial bill which calls for half a percent rental on notional value of the plot would also enhance volumetric sales of the plots in the DHA City, Bahria Town and in Scheme 33. As Karachi is trendsetter for property pricing, it is expected the returns in property for next two years across the country shall remain under pressure on account of profit-taking and taxation measures taken by the government.
PAGE: What is your perspective about investment in dollars?
Sanie Khan: If the IMF Program is not restored and Pakistan is unable to materialize PKR/RMB swap agreement in the letter and spirit, the dollar could cross Rs300/- in six-eight months’ time, else, it would stabilize at 190/- or little below.
PAGE: How would you comment on investment in gold?
Sanie Khan: If the Petro-Dollar gets weak and US inflation continues to increase with the same existing pace for two months, the gold is poised to go up and remain safe-heaven. This time, it is not war that expected to weaken the dollar, but trade-war between US and Asia economies.
PAGE: Are the current policies favourable for the investors?
Sanie Khan: Shehbaz Sharif’s government has broken the charisma and myth about PML(N) that they can manage dollar under any circumstances. Despite tall claims, Finance Minister Miftah Ismail has failed to contain the imports of luxury items. Investors do not mind ‘high-costs’ or ‘high-prices’, all they want is certainty. Pakistan at present appears to be in a war like situation: what is happening now, only happens in war. Nobody is investing due to a very high grade of uncertainty. Shehbaz government is telling folks and businesses not to indulge into any business or in job creation, as the government does not have money to buy fuel for energy.
All acts and deeds of Miftah Ismail are telling folks to ‘close the business and deposit money with bank @ markup rate of over 15%”. Fitch has downgraded Pakistan’s rating that would further deplete the Pakistani currency.
I hope PML (N) is not playing a folly to return a more troublesome Pakistan to players before November 2022 matches comes into play. This political gimmickry is gruesome for investors.
PAGE: How about investments in Capital Market?
Sanie Khan: Capital Market cannot stay aloof from a depressed Pakistan. We are a narrow market, and we are comfortable in being as an easy prey for government and opposing stalwarts to paint any picture of economy, as “they” want, because, only a few make gain out of it.
PAGE: What role can Capital Market play in stabilizing the Pakistani economy?
Sanie Khan: Growth is the function of Capital and Manpower. Pakistan’s Manpower runs the world, yet world does not looks at Pakistani Capital Market. The very few, who hold the Capital Market in their hand are needed to be educated that their wealth shall grow by multiple-time, should they let meaningful reforms to take place. There are host of areas where meaningful reforms are needed, these range between Linking New Entrants with Broker’s rating to strict punishments on client’s confiscation of asset, listing and d-listings. Yet listing and delisting are the core areas which are requires breaking of the power-centers so as to create space for logic and curtaining which leads to investor confidence.
PAGE: What is your perspective about Transparency in Delisting?
Sanie Khan: Transparency and element of decency in the listing and delisting process is central to winning the issuers confidence and expanding in issuers and investor-base at Pakistan Stock Exchange. It has suggested upon numerous occasions by the stock market investors and the capital market experts that determining buy-back-price through reverse-book-building in an automated manner is the only globally recognized practice.
Yet, folks at the helm spend precious time and resources to make human sit in a room and determine the de-listing price and in fifty years’ time. The existing regulations be amended in manner that restrict intermingling of brokers with Exchange Staff during the days when the de-listing price is determined and de-listing price be determined without any interference of brokers and be determined in the same manner as that of process that determines the listing price through book-building. to ensure to speculate that someone may be in contact with exchange or related official or members serving on the delisting committee of the Exchange and get the buy-back-price beforehand.