Strong Financial Nexus In OBOR States Needed : Experts
Muhammad Irfan Published April 20, 2019 | 11:10 PM
KARACHI, (UrduPoint / Pakistan Point News - 20th Apr, 2019 ) :The experts at investment conference called for establishing financial connectivity and nexus covered by China's One Belt and One Road initiative; especially between Pakistan and China to truly get the benefits of China-Pakistan Economic Corridor.
The strong financial networking will facilitate joint ventures not only between the companies of China and Pakistan, but with the companies from other states along OBOR, they said.
The conference was organized by VIS Credit Rating Company in collaboration with pakistan stock exchange Limited (PSX) and Pak China Investment Company Limited.
The event was organized to celebrate collaboration of VIS and CCXI.
The theme of the conference was to facilitate cross border investments into Pakistan and promote informed investment decision making along CPEC, One Belt and One Road.
Leading professionals and business personalities from the financial and industrial sectors of the country attended the moot.
Prime Minister's Advisor on Institutional Reforms and Austerity, Dr. Ishrat Hussain, being the chief guest, said he was scheduled to visit China soon to participate in the dialogue on OBOR and would especially talk on financial connectivity in the related countries.
Highlighting the importance of CPEC , he said, its positive impact had started coming on Pakistan's economy mainly in overcoming the energy crisis. Now, under the second phase of CPEC strengthening of Pakistan's industrial sector would be focused.
Following the China's policy of linking foreign direct investment to transfer of technology, Pakistan would bring FDI for transfer of technology and managerial restructuring.
He said Pakistan had liberalized economy and attractive for investment with 100 percent foreign ownership and no bar on repatriation of profits and dividends.
However, some regulations would have to be repealed for making Pakistan more attractive for local and foreign investment.
It was the Center and Provinces had separate regulations for investment, which discouraged investment. These regulations need to be reshuffled and some could be undone for bringing investment.
He said Pakistan Tehreek-i-Insaf government wanted to generate millions of jobs which could be done by strengthening private sector mainly tourism and construction industries.
He said for strengthening the country's capital market, the present government had placed the best available experts on Securities and Exchange Commission of Pakistan.
"We have also strengthened Pakistan Stock Exchange," he added.
CCXI is the largest rating agency in China with over 20,000 ratings outstanding currently and a work force of over 900 analysts based in China.
During the event, VIS & CCXI launched their jointly developed methodology.
PSX Chief Executive Officer, Richard Morin said seventy percent of Pakistan's economy was undocumented. This had pushed the capital to informal sector instead of capital market. These distortions impeded the development of Pakistan's capital market. Pakistanis miss out much higher long term returns on stock market, he said.
He emphasized on promotion of stock brokers for growth of the stock exchange.
"We need brokers to make money," he asserted.
He said Pakistan's capital market was moving from frontier to graduating market.
He spoke about the role psx in strengthening the country's economy.
PSX, being one of the stakeholders in VIS, was proud to have this collaboration between VIS and China Chengxin International Credit Rating Company Limited, Richard Morin said.
He said the rating agencies had a very important role to play in that they grade companies and organisations for analysts, investors, customers and other stakeholders and this grading serves as a benchmark for these companies' performance going forward.
On this occasion, VIS and CCXI launched their jointly developed methodology -- Investment Strength, Governance, Environment and Social (ISG-ES).
The Grading. ISG-ES is a pioneering grading methodology jointly developed by the two credit rating agencies VIS and CCXI. This was done by keeping in mind the information required by foreign investors while making long term investment decisions, said Chairman VIS Group of Companies, Faheem Ahmed.
He said the product was meant to grade organizations based on long term investment ability criterion with emphasis on overall investment financial strength, corporate governance standards established within the organization as well as a flavor of social responsibility and environmental accountability in processes and systems.
ISG-ES was especially envisioned to be useful for those organizations seeking long term local/foreign equity investment or those seeking to establish partnerships with companies for business opportunities under CPEC and/or the B&R initiative.
The product was envisioned to attract international investors and play a major role in the space of informed investment decision making.
Three prominent players from the financial and industrial sectors of Pakistan, Habib Bank Limited, Jubilee General Insurance Limited and International Industries Limited, who have already conducted ISG-ES assessment shared their experience and discussed benefits of such a pioneering product that provides them opportunities to showcase themselves as potential investment in Pakistan.
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