‘Pakistan lacks investors' base despite huge financial accessibility’

LAHORE: Abbasi Securities Director Ali Abbasi believes that there is a dire need of increasing investors’ base in the country, given the wide array of opportunities and financial accessibility in the market.

The brokerage industry in Pakistan is still in its embryonic phase, as the country does not possess a strong network of investors. With population touching the 200 million mark, the number of bank accounts stands only at 190,000, which testifies the abovementioned claim.

“We must utilise the financial accessibility of the market and work towards building a larger investors’ base,” Ali Abbasi said during an interview with Daily Times. “Due to lack of trust in brokers and limited exposure of the people towards investment, the brokerage industry has not been able to explore its full potential.”

However, the financial analyst is optimistic that through proper infrastructure of transparency, the brokerage firms could regain the trust and make the public realise about the value of investments.

Abbasi Securities, a Karachi-based stock brokerage firm, has evolved from a brokerage company to a complete wealth management firm offering stock brokerage, corporate bonds, commodities and mutual funds distribution.

Shedding light on his company’s successful growth over the years, Ali said: “By giving high quality personalised financial advice and with a mission to make investment a household name, the company has been able to become Pakistan’s premium money management and investment consultancy that introduces the policy of low risk with high returns.”

Commenting on regulations imposed by the Securities and Exchange Commission of Pakistan (SECP), he said increase in regulations only increases the cost of doing business without any associated benefit. “SECP brings in new regulations to identify and eliminate the black sheep of the industry. However, what they don’t realise is that such endeavours only overburden the honest and already suffering brokerage houses,” he added.

Ali, who has an experience of 18 years in private equity, venture capital and distress debt, suggests that instead of the commission, the investigation of runaway brokers should either to be given to the National Accountability Bureau (NAB) or to the Federal Investigating Agency (FIA).

“Rather than increasing the number of regulations, the commission should focus more on its timely implementation,” he said. “Before any legislation, there should be a cost benefit analysis. SECP may achieve its targets through stringent policies, but not before causing hindrances in the way of honest companies.”

Before joining Abbasi Securities in 2009, Ali spent 12 years working in the financial services sector in the United Kingdom. During this time, he helped shape businesses from sectors as diverse as mining, travel, logistics and manufacturing.

“An entrepreneur is someone who can pull all the resources together and create the right balance, hence it should not be linked with education. Anyone who has a good idea, an execution strategy and persistency in approach, can be a successful entrepreneur,” said Ali, who is also an associate member of the Institute of Chartered Accountants in England and Wales (ICAEW).

The increasing number of entrepreneurs, listing their companies on the exchange, show that the future of capital market is bright. Timely implementations of regulations would not only increase the investors’ base but also enable the capital market to help expedite economic growth of the country, Ali observed.

 

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