Assets under management of Islamic mutual funds increased from 1.7 to 2.2 trillion rupees

In stock mutual funds, number of Shariah-compliant funds is more than conventional funds, Commissioner Securities and Exchange Commission of Pakistan

Karachi: Commissioner Securities and Exchange Commission of Pakistan Imtiaz Haider has said that assets under management of Islamic mutual funds have increased from 1.7 trillion to 2.2 trillion rupees. In stock mutual funds, number of Shariah-compliant funds is more than conventional funds.

Addressing gong-bell ceremony on occasion of establishment of Shariah-compliant trading counter in Pakistan Stock Exchange, he said that launch of Shariah-compliant trading counter in PSX is an important milestone, increasing Shariah-compliant investment opportunities will strengthen investor confidence.

He said that out of 537 listed companies in PSX, 309 are Shariah-compliant and 65 percent of value of Pakistan's listed equity market consists of Shariah-compliant securities. There is scope for increase in Islamic financial products and investment opportunities in Pakistan, there are more investment opportunities in government Sukuk market, brokerage industry and capital market will get new opportunities from Shariah-compliant trading counter, if investment opportunities are created in Pakistan then foreign investors will also be attracted.

Imtiaz Haider said that SECP has given Shariah-compliant certification to 5 non-banking finance companies, lack of liquidity in Pakistan's capital market is an important challenge. Effective arrangements are necessary to cover risk in Shariah-compliant investment. He said that there is need to further strengthen Shariah screening methodology of KMI Index and automate system of collecting data from listed companies.

He further said that Shariah Index should be updated every 3 months instead of 6 months. There is need to promote listing of short-term corporate Sukuks, therefore cost in issuance of Sukuk should be reduced and approval process should be expedited. There is need to review regulatory framework for growth of Islamic brokerage industry, inclusion of new brokers in market and on-boarding of investors should be made easy.

Earlier, CEO Pakistan Stock Exchange Farrukh H. Sabzwari said that work on establishment of trading counter in PSX was underway since 2016. 70 percent of listed companies in Stock Exchange are Shariah-compliant, 80 percent of daily trading turnover is linked to Shariah-compliant companies.

He said that cooperation of SECP, brokers and Shariah experts is included in establishment of Shariah-compliant trading counter. Journey of KMI 30 Index started in 2008, debt and asset limit in Shariah Index was reduced from 37 percent to 33 percent. Daily average trading of Islamic Sukuk has reached 100 to 110 billion rupees, innovation introduced in green, hybrid and short-term Sukuk. Out of 9 ETFs of PSX, 2 are Shariah-compliant.

He said that out of 7 REITs of Pakistan Stock Exchange, 5 are Shariah-compliant, there is plan to introduce ESG Index in PSX in November.