FEDERATION OF EURO-ASIAN STOCK EXCHANGES
SEMI ANNUAL REPORT OCTOBER 2008
LAHORE STOCK EXCHANGE
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Mian Shakeel Aslam
Acting Managing Director
Pakistan’s economy shows increasing signs of
stress and remained under pressure during
the period under review. Envisaged
macroeconomic budgetary targets for financial
year 2007-08 were missed. The economy is
passing through a challenging period and
facing problems such as inflation, budget
deficit, trade deficit, weakening rupee, rising oil
prices, energy crisis and law and order issues.
However, despite the deterioration, it is also
important to note that as a result of structural
reforms and liberalization measures over the
last fifteen years, the economy has
fundamentally gained resilience.
The positive development on political front is
expected to catalyze the investor confidence
and pave way for a better investment climate
in the near future. This will also allow our
FUTURE OUTLOOK
With the advent of technology; approximately
49% of the trading volume is being generated
through remote trading terminals. It is also
because of technology that the LSE was able to
establish trading floors in other cities as well.
The LSE has trading floors in the cities of
Faisalabad and Sialkot and is now considering
opening trading floors in Multan and Peshawar
as well.
Introduction of index trading and derivatives
products such as options and swaps and other
products will increase the products offered by
the exchange, giving investors more choices
and hence increasing trading activity of the
exchange.
capital market to offer better returns to
investors based on their current price/earnings
multiple discounts when compared to other
regional market.
The market remained unstable during the
period under review. LSE-25 Index showed a
bullish trend in the first quarter and after
touching the bottom at 4212.25 points on 2
January 2008 started to gain momentum to
reach the height of 4945.79 points on 26
February 2008. In the second quarter of year
2008 market remain volatile, it started to
decline and touch the bottom of 3511.18
points on June 23, 2008. In the third quarter
the market remain bearish to as index closed
at 3292.99 points on 15 August 2008.
Integration of the exchanges is also being
considered and is likely after demutualization.
Another concept that will help greatly in
expanding investor base is cross listings and
GDRs. Work is underway in this regard.
In 2008 Lahore Stock Exchange plans to:
• continue with its strategy of increasing its
geographical outreach through the use of
information technology in order to attract higher
trading volumes;
• phase-out of Carry-Over Trading and its
replacement with Margin-Trading and other
modes of financing;
• frame a strategy for the demutualization and
integration of the stock exchanges of Pakistan
in the interest of the Exchange and capital
markets of the country;
As of 15 August 2008 the market capitalization
of the Lahore Stock Exchange (LSE) was US$
38.722 billion. The average daily turnover of
shares remained 18.968 million shares with an
average daily value of shares traded of US$
29.478 million. The LSE listed 1 company, 6
open-end mutual funds and 2 term finance
certificates during the period under review.
The LSE is expeditiously working on its
corporatization and demutualization. The
completion of process of demutualization has
been targeted by 31 December 2008.
Demutualization will give the Exchange the
room to expand and to take up joint ventures
which are probably not possible in mutualized
exchange. Integration of exchanges is also
being considered and is likely after
demutualization.
• enhance trading in the derivatives market
and introduce Stock and Sector Index Futures;
• replace existing exposure monitoring system
with Value at Risk Margin System in line with
global practices;
• Market BrokerNet - Broker hosted Internet
Stock Trading Solution;
• promote and market the indigenously
developed trading software i.e. Ultra Trade and
related systems to other stock exchanges;
• implement a regular timetable for the Broker
System Audit, in order to build investors’
confidence; and
• strengthen the surveillance function of the
Exchange
CONTACT INFORMATION
Contact Name Mr. Amir Razakhan
E-mail [email protected]
Website www.lahorestock.com
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