JUNE 2013 - FEAS

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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013 LAHORE STOCK EXCHANGE Aftab Ahmad CEO/Managing Director Our economy has shown strong capacity to overcome challenges originated from both internal and external economic environment. ECONOMIC OVERVIEW The macroeconomic landscape of the country was badly affected by devastating floods in July 2010, which directly affected about 20 million people, mostly by destruction of property, livelihood and infrastructure; thereby inflicted significant damage to the fragile economy. ADB approved a US$ 650 million loan to Pakistan which was used to rebuild the damaged infrastructure. Shortage of power and gas, escalating utilities costs, high borrowing cost exacerbated the situation for Large Scale Manufacturing as well as Service sectors. The fiscal position remained weak with poor revenue generation whilst expenditure escalated. Real GDP growth in the outgoing year was recorded at 2.4% as compared to 3.8% in the previous Fiscal Year. Nevertheless, our economy has shown strong capacity to overcome challenges originated from both internal and external economic environment while struggling towards achieving long term sustainable growth. PERFORMANCE OF THE MARKET The market started in the FY 2010-11 with some positive note as LSE-25 Index starting from 3092.70 points. The market and the Index reached the lowest level of 2970.86 points of the period under review and closed at 3051.12 points at the close of the financial year. Local investors remained jittery while seeking clarity on the modalities of Capital Gain Tax (CGT). Investment in capital market during the period July-March 2010-11 by the foreign investors depicted a net inflow of US$ 301.5 million. Corporate profitability increased in year 2011 but profitability concentrated in few large companies in the Energy, Telecom and Banking sectors. During the period under review, seven Open end Funds were listed. Further, two companies, one TFC and one Participation Term Certificate were in the pipeline of listings. Two Closed end Funds were converted into Open End Funds. Twelve securities were delisted out of which three companies merged with other companies, seven companies went into Winding Up by Court Orders, one Open end Fund matured and fully redeemed and one Company was de-listed after the buy-back the shares by the sponsors. Total companies listed at LSE were 496 as compared to 510 companies in the previous year. The total listed capital increased from Rs. 842.596 billion (US$ 9.362 billion) to Rs. 888.190 billion (US$ 9.868 billion) as on June 30, 2011. Similarly, the aggregate market capitalization increased from Rs. 2,622.928 billion (US$ 29.143 billion) to Rs. 3,166.044 billion (US$ 35.178 billion) as on June 30, 2011. The volumes of the Exchange shrunk considerably i.e. by 66%. During the period under review, total share volume of regular market reduced to 1,124.762 million shares as compared to previous FY figure of 3,362.668 million shares. Complementing the efforts of members and listed companies in seeking to find better levels of optimum operational efficiency, LSE continued to identify areas of improvement as part of the Exchange’s present and future development. PAGE 60
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013 LAHORE STOCK EXCHANGE HISTORY AND DEVELOPMENT Lahore Stock Exchange, established in October 1970, is a fast emerging market in the country. Currently, it is considered as second largest stock exchange with a market share of around 12-15% in terms of daily traded volumes, however, the way it is catching up on the back of enormous economic growth in the provincial capital the outlook of Lahore Stock Exchange giving a signal of gaining position of tilting balance in its favor. Currently, LSE has 506 companies, spanning 37 sectors of the economy, that are listed on the Exchange with total listed capital of Rs. 845 billion having market capitalization of Rs. 2.7 trillion as of date. We have 152 members of whom 113 are corporate and 39 are individual members. An overview of the measures that have taken place at LSE over the past few years as part of its ongoing development plans and reforms portrays a number of significant initiatives taken to improve the regulatory regime and the trading environment for the benefit of Institutional Investors as well as listed companies. FUTURE OUTLOOK • Corporatization and Demutualization of the Exchange. • Setting up a Disaster Recovery site at an internationally certified data center. • Web based Trading Portal. • Advanced Trading Terminal with integrated market intelligence. • Introduction of Market Makers to improve liquidity and increase market depth. • Launching of continuous trading session “After-Hours Trading”. • Introduction of Multi Trades Access System for order routing through gateway connectivity. • To enhance participation of Financial Institution, Mutual Funds and Foreign Investors. • Launching new products like Options, Stock Index Futures, Dividend Futures, and Call Warrants. • To achieve target to improve & develop internal software and technology at the international standard. • Launching of Mobile Trading. • Listing of global stock markets Indices at the Exchange. • To establish & Implement trading platform for the Exchange Companies, Agri- Commodities. • To promote Financial Literacy Initiative - Campus Outreach Program. • To put Investor Relations in to practice. CONTACT INFORMATION Contact Name Mr. Farid Malik E-mail farid.malik@lse.com.pk Website www.lahorestock.com * Please refer to page 54 for the Pakistan country report. PAGE 61
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JUNE 2013 - FEAS

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