It could be the next big boost to Indo-Pak business and trade relations. If everything goes well, soon investors from Pakistan and India will be able to trade on major stock exchanges of each other. Karachi Stock Exchange (KSE) and Bombay Stock Exchange (BSE) are in discussions for cross-listing of their benchmark indices — KSE 100 Index and Sensex — on each other’s bourses.
“Karachi Stock Exchange and Bombay Stock Exchange are discussing listing of the two indices. Sensex can be listed on KSE and KSE-100 can be listed on BSE,” Muhammad Ali, Chairman, Securities and Exchange Commission of Pakistan (SECP) told Express. KSE is the biggest exchange in Pakistan with an average daily turnover of 254 million shares.
As a first step towards forging close linkages between the two bourses, Ali said the Pakistani regulator has already given in-principle approval to KSE for the two-way cross listing of indices. Without giving a concrete timeframe, he expressed the hope that the cross-listing of indices can happen as soon as possible.
However, a BSE spokesperson refused to comment on the talks with KSE.
Ali, who was recently in India to attend the World Economic Forum held in Gurgaon, said SECP is taking a number of steps to create a conducive environment for growth of capital markets in Pakistan. As part of that, Pakistani President Asif Ali Zaradari had given assent to the Stock Exchanges (Corporatization, Demutualisation & Integration) Act, 2012.
Demutualisation of stock exchanges entail converting their structure from non- profit, mutually owned organization to for-profit entities owned by shareholders.
“What we are working on is to effectively separate the ownership and management (of stock exchanges). We are coming up with a chief regulatory officer,” he added.
Going forward, Ali said SECP is also exploring the possibility of introducing a small and medium stock exchange whereby medium sized companies can also come and list themselves.