Stock market rackets"As Chinese take over stock exchange, the corrupt elements seem to be panicking

[Shahzaz ud din]

Stock market rackets:
As Chinese take over stock exchange, the corrupt elements seem to be panicking:
EditorialUpdated November 29, 2017
7

5

AN old racket now faces a new challenge.

The stock market has long been known as a hive of insider trading, front running, wash trades, pump-and-dump schemes and leakage of proprietary trading data of individual brokers against a payment.

But now a new shareholder, in the shape of a Chinese consortium that owns controlling stake in the newly divested stock exchange, wants to instal a Canadian managing director, and is facing stiff resistance from the broker community.

At the same time, a loud and aggressive protest by some brokers against what they allege to be illegal leakage of trade data of buy-and-sell orders of individual Unique Identification Numbers has triggered an investigation from the Securities and Exchange Commission of Pakistan.

ADVERTISEMENT
The investigation is unlikely to get any further than the last such inquiry conducted a few years ago, leading to a report in 2014 which has been buried ever since.

But the SECP’s inability to get to the bottom of one of the oldest and most deeply entrenched rackets in the stock market does not mean that the new shareholder and management of the PSX will be equally helpless.

Technology provides all sorts of answers to detect such rackets and identify the culprits.

Only the will to pursue the racketeers will be required, and given the new landscape following the historic divestment of the bourse last year, this could well be forthcoming.

The divestment of the bourse is a goal more than a decade in the making, and now that it has been achieved, the real story can begin.

The new owners and the soon-to-arrive managing director should pay careful attention to the politics of the broker community, especially as they revealed themselves in the Oct 24 meeting, which descended into a shouting match as per some reports.

This close attention will help them to determine who stands where in these rackets, and where opposition is likely to originate if and when they press ahead with tackling these rackets.

Plugging the leak of proprietary data should be an important priority for them.

Divestment of the bourse was never meant to be an end in itself.

It was a means towards ending the culture of racketeering that permeates the stock market, and the moment presents a good opportunity for the new shareholders to begin that task.

Published in Dawn, November 29th, 2017

 

[Sliver]

Divestment of the bourse was never meant to be an end in itself.

It was a means towards ending the culture of racketeering that permeates the stock market, and the moment presents a good opportunity for the new shareholders to begin that task.

in essence, you needed a Canadian and the Chinese to fix your problems of corruption and insider trading, fix your stock markets frin implosion because Pakistanis couldn't do that themselves. Eerie resemblance to the story of the white man's burden.

 

[Clutch]

Good... they need to clean the corrupt legal gambling house called the PSX

Chinese owners of PSX promise exchange-traded funds
The Newspaper's Staff ReporterUpdatedNovember 29, 2017
29
3

KARACHI: China Financial Futures Exchange Director You Hang said on Tuesday investors will soon have the opportunity to invest in a Pakistan exchange-traded fund (ETF) in China.

An ETF is a derivative product that represents a basket of underlying assets, such as stocks. It is traded on a stock exchange just like an ordinary share.

Speaking at the second Mergers and Acquisitions Conference organised by TerraBiz, Mr You said Chinese shareholders in the PSX want to introduce derivative products in the national equity market.

“Not only do we want to bring ETFs here in Pakistan, we also want to introduce Pakistan ETF into the Chinese market,” he said, adding that few futures products are currently available on the PSX.

ARTICLE CONTINUES AFTER AD
China Financial Futures Exchange is part of the consortium that recently acquired a 40 per cent stake in the PSX.

Mr You acknowledged that the IT system of the PSX requires an immediate revamp. “Several incidents happened in the past few months. There are issues,” he said. Trading remained suspended on Oct 25 for one hour and 20 minutes due to a “technical fault”. In addition, brokers have been complaining about frequent “data leakages” that compromise transparency and give undue advantage to a few players.

Mr You said the importance of the PSX in the wake of the China-Pakistan Economic Corridor (CPEC) has increased as a major avenue for raising money for development projects.

“The CPEC is a huge opportunity for the PSX. A lot of Chinese firms are working here. They are trying to find ways to raise funds,” he said, urging firms to generate capital through the stock exchange instead of bank borrowing.

Published in Dawn, November 29th, 2017