ISLAMABAD: There is a need for the development of the
derivatives market, which will enhance access to finance and improve
price risk management, according to the annual report issued by the
Securities and Exchange Commission of Pakistan (SECP) on Friday.
In
his message, SECP’s acting chairman Zafar Abdullah said a strong link
needs to be established between the real economy and the capital market
to develop the bond market.
“We need to introduce
products like equity derivatives, interest rate derivatives,
agricultural commodity derivatives and electronic warehouse receipt
finance,” he said.
The report also highlighted the need
for the introduction of modern financial market tools in the agriculture
sector. “The SECP needs to support the growth of agricultural produce
companies by engaging with all relevant stakeholders to create a
comprehensive and modern policy framework,” it said.
It
will allow the development of the entire agriculture value chain, the
report said. It is expected that the new measures will aid in growth and
documentation of the economy.
“With a contemporary legal
framework and a revised structure in place, the SECP has the right
platform and momentum to steer Pakistan towards a brighter future,” Mr
Abdullah said.
He said the SECP needs to focus on the
creation of new departments within the commission to facilitate
horizontal growth and meet the needs in terms of technology and manpower
capacity-building.
The report highlights that there is a
huge potential for the expansion and growth in the insurance sector due
to the large untapped market on the life insurance side. In addition,
it also points to the economic opportunities brought on by the
China-Pakistan Economic Corridor (CPEC) in the non-life insurance
sector.
The insurance industry exhibited a modest growth
of 14 per cent in gross direct written premium whereas an 18pc growth in
total assets was recorded in 2016.