JUNE 2013 - FEAS

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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013LAHORE STOCK EXCHANGEAftab AhmadCEO/Managing DirectorOur economy has shown strong capacityto overcome challenges originated fromboth internal and external economicenvironment.ECONOMIC OVERVIEWThe macroeconomic landscape of the countrywas badly affected by devastating floodsin July 2010, which directly affected about20 million people, mostly by destruction ofproperty, livelihood and infrastructure; therebyinflicted significant damage to the fragileeconomy. ADB approved a US$ 650 millionloan to Pakistan which was used to rebuildthe damaged infrastructure. Shortage ofpower and gas, escalating utilities costs, highborrowing cost exacerbated the situation forLarge Scale Manufacturing as well as Servicesectors. The fiscal position remained weak withpoor revenue generation whilst expenditureescalated. Real GDP growth in the outgoingyear was recorded at 2.4% as compared to3.8% in the previous Fiscal Year. Nevertheless,our economy has shown strong capacity toovercome challenges originated from bothinternal and external economic environmentwhile struggling towards achieving long termsustainable growth.PERFORMANCE OF THE MARKETThe market started in the FY 2010-11 withsome positive note as LSE-25 Index startingfrom 3092.70 points. The market and the Indexreached the lowest level of 2970.86 points ofthe period under review and closed at 3051.12points at the close of the financial year. Localinvestors remained jittery while seeking clarityon the modalities of Capital Gain Tax (CGT).Investment in capital market during the periodJuly-March 2010-11 by the foreign investorsdepicted a net inflow of US$ 301.5 million.Corporate profitability increased in year 2011but profitability concentrated in few largecompanies in the Energy, Telecom and Bankingsectors.During the period under review, seven Openend Funds were listed. Further, two companies,one TFC and one Participation Term Certificatewere in the pipeline of listings. Two Closed endFunds were converted into Open End Funds.Twelve securities were delisted out of whichthree companies merged with other companies,seven companies went into Winding Up byCourt Orders, one Open end Fund matured andfully redeemed and one Company was de-listedafter the buy-back the shares by the sponsors.Total companies listed at LSE were 496 ascompared to 510 companies in the previousyear. The total listed capital increased fromRs. 842.596 billion (US$ 9.362 billion) to Rs.888.190 billion (US$ 9.868 billion) as on June30, 2011. Similarly, the aggregate marketcapitalization increased from Rs. 2,622.928billion (US$ 29.143 billion) to Rs. 3,166.044billion (US$ 35.178 billion) as on June 30,2011. The volumes of the Exchange shrunkconsiderably i.e. by 66%. During the periodunder review, total share volume of regularmarket reduced to 1,124.762 million shares ascompared to previous FY figure of 3,362.668million shares.Complementing the efforts of members andlisted companies in seeking to find betterlevels of optimum operational efficiency, LSEcontinued to identify areas of improvementas part of the Exchange’s present and futuredevelopment.PAGE 60
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013LAHORE STOCK EXCHANGEHISTORY AND DEVELOPMENTLahore Stock Exchange, established inOctober 1970, is a fast emerging market in thecountry. Currently, it is considered as secondlargest stock exchange with a market shareof around 12-15% in terms of daily tradedvolumes, however, the way it is catching up onthe back of enormous economic growth in theprovincial capital the outlook of Lahore StockExchange giving a signal of gaining positionof tilting balance in its favor. Currently, LSEhas 506 companies, spanning 37 sectors ofthe economy, that are listed on the Exchangewith total listed capital of Rs. 845 billion havingmarket capitalization of Rs. 2.7 trillion as ofdate. We have 152 members of whom 113 arecorporate and 39 are individual members.An overview of the measures that have takenplace at LSE over the past few years as partof its ongoing development plans and reformsportrays a number of significant initiatives takento improve the regulatory regime and the tradingenvironment for the benefit of InstitutionalInvestors as well as listed companies.FUTURE OUTLOOK• Corporatization and Demutualization of theExchange.• Setting up a Disaster Recovery site at aninternationally certified data center.• Web based Trading Portal.• Advanced Trading Terminal with integratedmarket intelligence.• Introduction of Market Makers to improveliquidity and increase market depth.• Launching of continuous trading session“After-Hours Trading”.• Introduction of Multi Trades AccessSystem for order routing through gatewayconnectivity.• To enhance participation of FinancialInstitution, Mutual Funds and ForeignInvestors.• Launching new products like Options, StockIndex Futures, Dividend Futures, and CallWarrants.• To achieve target to improve & developinternal software and technology at theinternational standard.• Launching of Mobile Trading.• Listing of global stock markets Indices at theExchange.• To establish & Implement trading platformfor the Exchange Companies, Agri-Commodities.• To promote Financial Literacy Initiative -Campus Outreach Program.• To put Investor Relations in to practice.CONTACT INFORMATIONContact 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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