This document provides an overview of initiatives taken by the National Stock Exchange of India (NSE) and Central Depository Company of Pakistan (CDC) to develop capital markets in 2013. It includes an interview with the Vice President of NSE discussing programs to educate investors and develop human capital. It also includes an interview with the CEO of CDC discussing initiatives to increase efficiency and outreach in Pakistan such as new depository services. Both executives discuss their visions for continued education initiatives and regional cooperation in 2014. The document provides background information on NSE and CDC.

1. Developing Capital Markets Through Regional Cooperation
SOUTH ASIAN
FEDERATION OF EXCHANGES
CAPITAL
MARKETS
December| 2013
p1
p3
Interviews
this month’s special
Industry Focus
this month’s special
Members’
Contributions
p9
p14 South Asian Securities
Markets Highlights
A MONTHLY E-PUBLICATION ABOUT THE DEVELOPMENTS IN THE CAPITAL MARKET INDUSTRY OF THE REGION
An Interview with
Mr. Hari K.
Vice President, National Stock Exchange of India Limited
Special
Industry
Focus
National Stock Exchange of India Limited
An Interview with
Mr. Muhammad Hanif Jakhura
Chief Executive Officer CDC Pakistan
Special Industry Focus

2. QA
&
with
Mr. Hari K.
Vice President, National Stock Exchange of India Limited
An exclusive interview of NSE’s Vice President
Mr. Hari K. with SAFE Secretariat
Q: What initiatives have been taken to
develop and increase the efficiency &
investor outreach of NSE in year 2013?
A: The exchange has played a key role in growing
investor participation, through engagement
initiatives with various market participants and
stakeholders. NSE is conducting programmes to
create awareness in the youth, investors and
potential investors. The exchange conducts
nearly 1500 investor awareness seminars every
year in metros as well as small towns on different
aspects of the financial markets. The seminars
throw light on the various do's and don'ts of
trading, rights and obligations of investors and
educates investors on investing opportunities.
Investors are also educated so that they can
overcome some of the fears they have about the
markets. The exchange is also educating its
investors on various products like Nifty ETF's, the
upcoming CPSE-ETFs (which will be based on
stocks of public sector enterprises) and other
retail products.
NSE is also conducting knowledge builder and
knowledge hour sessions for its dealers and
members. The knowledge hour sessions focus
on discussing product specifics for a better
understanding of different products and other
market related issues. Nearly 50 such
programmes are being conducted in the different
regions every month.
The knowledge builder sessions are more detailed interactions, where domain experts are imparting soft skills like
awareness on the economy, how the world economy affects the Indian markets, how the Indian economy affects
the markets and more detailed perspective on different products. Our regional offices are organizing at least 20
such sessions in a month. Today, NSE has nearly 45 RMs across India. This becomes critical because members
and dealers are the first point of contact for investors.
These initiatives are helping in growing the investor base significantly. For instance, there is high retail participation
from the non-tier one and non-tier two cities in the capital market segment. Of the investment by retail investors in
the cash market, nearly 44 per cent turnover is coming from investors in non-tier one and non-tier two cities and 50
PAGE 01

3. per cent of the retail investors are investing from these small towns. If we take Income Tax payment as a proxy for
financial capacity to have risk capital to invest in stock markets, of the 3.4 crore tax payers, 1.5 crore investors are
investing through NSE which is approximately 45% penetration. This is comparable to most markets.
We are placing emphasis on systematic investment in capital markets through instruments like ETF's which are
well suited for retail investors who may have financial, technical and time constraints in investing on their own. We
are seeing encouraging results with large number of SIP accounts getting opened for ETF investment every
month.
There is further significant potential for taking the benefits of capital markets to larger sections of the population.
For achieving this, large trained and skilled manpower is required. NSE has been very active in ensuring that
requisite skills are imparted to our youth to undertake this effort. In this direction NSE has certified over 10 lakh
people in various aspects of capital market operations. NSE has launched financial awareness and skill
development programs directed at various levels of students – from class 8 to MBA.
Both financial awareness and skill development are ongoing efforts and we at NSE will continue to dedicate
ourselves to this task.
What plans are in offering to increase market share of NSE and what is your vision for a marketplace in year 2014?
While NSE has been focusing on the domestic market through various investor initiatives, considerable
importance is given to expanding NSE's global footprint. This is being done through product partnerships with
International exchanges and global tie ups, to give foreign investors an opportunity to invest in Nifty 50, the index
which constitutes the top 50 stocks traded on NSE, by market cap.
Currently, Nifty futures and options are trading on the Singapore stock exchange and mini Nifty contracts are being
traded on Chicago Mercantile exchange. NSE also has a partnership with the Japan exchange group, to launch
Nifty futures in the summer of 2014. Exchange traded funds based on Nifty are also trading in 15 international
exchanges.
NSE would continue to focus its attention on protecting investor interest, launching products which suit the needs
and risk profiles of all classes of investors and maintaining a robust risk management system. NSE will also
continue to take initiatives to reduce overhead costs for market participants and stay ahead of the curve by
providing technology, with the lowest latency and quick response time.
PAGE 02

4. IN
DUSTRY
FOCUS
National Stock Exchange of India Limited
National Stock Exchange of India Ltd.
About
The National Stock Exchange (NSE) is India's leading stock exchange covering various cities and towns across the country.
NSE was set up by leading institutions to provide a modern, fully automated screen-based trading system with national reach.
The Exchange has brought about unparalleled transparency, speed & efficiency, safety and market integrity. It has set up
facilities that serve as a model for the securities industry in terms of systems, practices and procedures.
NSE has played a catalytic role in reforming the Indian securities market in terms of microstructure, market practices and
trading volumes. The market today uses state-of-art information technology to provide an efficient and transparent trading,
clearing and settlement mechanism, and has witnessed several innovations in products & services viz. demutualisation of
stock exchange governance, screen based trading, compression of settlement cycles, dematerialisation and electronic
transfer of securities, securities lending and borrowing, professionalisation of trading members, fine-tuned risk management
systems, emergence of clearing corporations to assume counterparty risks, market of debt and derivative instruments and
intensive use of information technology.
Awards and Recognition
è
NSCCL Rated “CCR AAA” for fifth consecutive year – 3rd Jan, 2013.
è
For fifth consecutive year CRISIL has assigned its highest corporate credit rating of 'CCR AAA' to the National
Securities Clearing Corporation Ltd (NSCCL). 'CCR AAA' rating indicates highest degree of strength with regard to
honouring debt obligations. As per CRISIL the rating reflects NSCCL's status as Clearing Corporation for NSE. The
rating also factors in NSCCL's rigorous risk management controls and adequate settlement guarantee cover.
è
CRISIL has further stated that NSCCL's risk management system is comprehensive, and is regularly upgraded to preempt market failures. The company addresses risks in clearing and settlement with its stringent norms for selection of
members, robust margining system, and risk-based position limits and surveillance mechanism.
è
NSE and NSCCL receive Asian Banker awards April 26th, 2010
NSE has been awarded 'The Asian Banker Financial Derivative Exchange of the Year Award" NSCCL has been
awarded 'The Asian Banker Clearing House of the Year Award’
è
NSE awarded 'Derivative Exchange of the Year' [older than 2010]
The award recognizes best practice, quality service and innovation in derivatives and risk management in the AsiaPacific region. The winning institutions are those that, over the past year, have responded best in the needs of their
clients, both on the asset and liability side, along with the end-users that have demonstrated outstanding trading and
risk management strategies.
è
'Asia Risk' is the only publication dedicated solely to the business of financial risk management and the derivatives
market in the Asia-Pacific region since 1995. Know more
Brief History
13-May-13
10-Jan-13
3-Jan-13
18-Sep-2012
27-Jun-12
3-May-12
22-Mar-12
PAGE 03
NSE launches the first dedicated Debt Platform on the Exchange
Agreement on Launch of S&P CNX Nifty Futures in Japan
NSCCL Rated CCR AAA for fifth consecutive year
NSE launches SME operations
NSE launches financial literacy initiative ' Jagruti' in Mohali, in partnership with India Post
Futures and Options contracts on FTSE 100
NSE and India Post start Unique Financial Inclusion Initiative "Jagruti"14-Mar-12NSE launches
“EMERGE” - SME Platform

5. QA
&
with
Mr. Muhammad Hanif Jakhura
Chief Executive Officer CDC Pakistan
An exclusive interview of CDC’s Chief Executive Officer
Mr. Muhammad Hanif Jakhura with SAFE Secretariat
Q: What initiatives have been taken to develop and
increase the efficiency & services of CDCPL in the
year 2013?
A: The year 2013 has witnessed steady growth in
almost all areas of our operations. The securities under
our custody have crossed one hundred billion rupees
with its market value touching approximately Rs.
3trillion, which is a great achievement for our company.
During the year, State Bank of Pakistan has reposed its
trust on us by granting us with the membership of
Pakistan Real Time Interbank Settlement Mechanism
(PRISM) and Real time Gross Settlement (RTGS)
enabling us to offer Investment Portfolio Services of
Government Securities to retail investors so they can
maintain their complete investment portfolio with us.
Similarly, we have signed Memorandum of
Understanding with Insurance Industry for Centralized
Information Sharing Solution which will enhance
efficiency of the Insurance Industry and another service
called Back Office System for the Mutual Fund industry
is about to be launched. Apart from these development
initiatives, we have also conducted several awareness
sessions, information seminars and trainings to
increase investor outreach. Informational material has
been developed and distributed, and direct interaction
with investors has been ensured on a regular basis.
Q: The CDCPL was recently elected as the secretariat of the Asia-Pacific Central Securities Depositories Group
(ACG) with yourself being elected as Chairman of its Executive Committee. How in your opinion will this
development help to enhance infrastructure resilience and promote greater stability in the South Asian capital
markets as well as that of Pakistan in particular?
A: It's an honor for me that I have been elected as the Chairman of Executive Committee of the Asia-Pacific Central
Securities Depositories Group (ACG) and similarly CDC Pakistan has become ACG Secretariat for the next three
year term by the virtue of my election. With this appointment, I will be representing the Asia-Pacific Region on the
Executive Board of World Forum of CSDs (WFC), which comprises of 5 regional CSD associations including
Americas' Central Securities Depositories Association (ACSDA), Association of Eurasian Central Securities
PAGE 04

6. Depositories (AECSD), European Central Securities Depositories Association (ECSDA), Africa and Middle East
Depositories Association (AMEDA) and ACG. I will also be serving on other platforms like International Securities
Services Association (ISSA), Association of Global Custodians (AGC) and the Committee on Payment and
Settlement Systems of the International Organization of Securities Commissions (CPSS-IOSCO).
I think my election as the Chairman of ACG is an honor for the entire South Asia and will promote softer image of
Pakistan and at the same time will provide me with an opportunity to further strengthen the ACG platform for all
members. It is also very interesting to note that out of eight executive committee members of ACG, three are from
South Asia.
In terms of infrastructure resilience, we have recently introduced the Risk & Recovery Management Taskforce in
ACG. The task force members will be sharing information and insight on how we can minimize risks and ensure
early recovery at minimal possible time in case of any untoward event. The taskforce will enable its members to
exchange information on various procedures and systems in place so as to improve any deficiencies.
Q: What are the prevalent pitfalls faced by the South Asian financial services industry towards achieving an
exchange of information and mutual assistance on the regional scale?
A: Being the Chairman of the Asia-Pacific Central Securities Depositories Group (ACG), I would like to see more
information sharing and mutual assistance among countries especially in South Asia. Of course Politics do play a
role but I don't see anything which I can say is a pitfall faced by countries in South Asia for information sharing and
mutual assistance on the regional scale. Rather, I would say that SAFE itself is one of the great platforms for
regional information sharing and similarly, the broader platform of ACG allows securities depositories and clearing
companies to meet and share information and promote mutual assistance between Asia-Pacific countries.
Q: In your opinion, how shall the stock market in Pakistan benefit, if cross-border listing is allowed within South
Asian region?
A: It will be great news for the entire South Asia and its economy. Karachi Stock Exchange has been among the
world's best performing stock markets and 14 Pakistani equity funds have been among the world's 100 top
performing funds in the past year. So certainly our stock exchanges will be able to attract listings from companies
across South Asia. It will specially benefit companies from smaller South Asian nations. Similarly, it will provide
opportunity to Pakistani companies in raising equity from other successful regional Stock Markets.
Q: What is your ideal vision for the year 2014, and what goals does the CDCPL intend to achieve in the near
future?
A: Regional economic integration is a great way of moving forward making our knowledge sharing circle stronger
and broader. CDC Pakistan being a catalyst of change will keep its focus on strategy of diversification into other
services having synergy with our core competencies. We have already launched Investor Portfolio Services for
Government Securities and Centralized Information Sharing Solution for the Insurance Industry and planning for
the launch of Back Office System for Mutual Fund industry is underway. We intend to grow these services and also
focus our attention towards Investor Awareness to help promote financial literacy and investor base in Pakistan.
PAGE 05

7. IN
DUSTRY
FOCUS
Central Depository Company of Pakistan
Vision & Mission
Incorporated in 1993, Central Depository Company of Pakistan Limited (CDC) is the sole entity handling the electronic
(paperless) settlement of securities transactions carried out at all three stock exchanges of Pakistan without any physical
movement or endorsement of security certificates and execution of transfer instruments. The company manages
approximately 99% of the Pakistani market settlement in book entry form and provides depository services to a wide range of
Capital market participants which includes Stock Brokers, Asset Management Companies, Banks (including Custodian
Banks) and general retail investors.
Regulated by the Securities and Exchange Commission of Pakistan (SECP), the company has offices in Karachi, Lahore and
Islamabad.
Vision & Mission
Vision
To be a leading national institution providing quality services to capital & financial markets stimulating economic growth.
Mission
CDC is committed to provide secured & dependable services to the capital & financial markets in an efficient & cost effective
manner comparable to best international practices. The Company's aim is to be the centre of excellence by continuously
employing the state-of-the-art technology available & best talent in the country while maintaining good corporate governance
in its working. It is committed to provide its employees an environment of professional & personal growth.
International Affiliations
CDC is continuously enhancing its knowledge and capabilities in response to an increasingly unpredictable and dynamic
business environment to achieve better results. CEO-CDC has recently been elected as the Chairman of Executive
Committee of Asia-Pacific Central Securities Depository Group (ACG) whereas CDC Pakistan has become ACG Secretariat
for a three year term. The company is also an active member of South Asian Federation of Exchanges (SAFE), International
Securities Services Association (ISSA) and Association of National Numbering Agencies (ANNA).
To avail benefits of cross-border cooperation, explore avenues of mutual assistance and enhance coordination with
international depositories, CDC has signed ten Memorandums of Understanding (MoUs) with regional and international
depositories. These include:
è
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Depository Trust & Clearing Corporation (DTCC), U.S.A.
China Securities Depository and Clearing Corporation (SD&C)
Japan Security Depository Centre (JASDEC)
Korean Securities Depository (KSD)
Indonesia Clearing & Guarantee Corporation (KPEI)
Thailand Securities Depository (TSD)
Central Securities Depository of Iran
Abu Dhabi Securities Market (ADSM)
Dubai Financial Market (DFM)
Taiwan Depository & Clearing Corporation (TDCC)
These MoUs entail cooperation in the areas of technology exchange, operational procedures, mechanism for cross-border
listing of securities and exchange of information. These affiliations, MoUs, techs and practices help the company to learn from
each other's experience in the areas of operations, product development, infrastructure development and several other areas.
PAGE 06

8. MEMBERS’
CONTRIBUTIONS
ADX Signs
Registrar
Agreement with
Etihad Capital
-ADX Press Release
Abu Dhabi Securities Exchange
(ADX) signed a Registrar Agreement
with Etihad Capital Company. The
agreement was signed between Mr.
Ghanem Al Dhaheri, Deputy CEO of
ADX, and Mr. Khamis Buharoon Al
Shamsi, Chairman and CEO of Etihad
Capital, at Abu Dhabi Securities
Exchange main offices in Abu Dhabi n
the presence of senior staff of both
parties. Mr. Ghanem Al Dhaheri,
Deputy CEO of ADX said in an ADX
Tadawul and
ADX Sign
Cooperation
Agreement
-ADX Press Release
The Saudi Stock Exchange (Tadawul) and
the Abu Dhabi Securities Exchange (ADX)
have today entered into a Memorandum
of Understanding (MoU), which will serve
to augment the already robust bilateral
relationship between the two exchanges.
According to the MoU, signed by Rashed
Al-Baloushi, the Chief Executive Officer of
the Abu Dhabi Securities Exchange and
official press release “This agreement
is a significant move that will generate
the opportunity for investors to trade
in company stocks due to the
availability of an official market record
established under the terms of this
agreement. ADX is obligated to
provide an electronic stock-saving
system for transferring stock
ownerships in the company in
accordance with UAE financial laws”
Deputy CEO of ADX concluded by
saying:” ADX looks forward to
providing all the necessary services
and meet all the requirements in
accordance with the finest standards
available in capital markets. We hope
that this agreement will help us move
closer to achieving our goals in line
with the Abu Dhabi Economic Vision
2030,”
Mr. Khamis Buharoon Al Shamsi,
Chairman & CEO of Etihad Capital
said in the press release issued by
ADX:” We extend our sincere thanks
to Abu Dhabi Securities Exchange on
the outstanding services provided by
their management and the team work
that facilitated the tasks and support
of our agreement. Our agreement is
pursuant to the decision of the
Minister of Economy No. 360 for the
year 2009 for record shares of private
equity firms and in accordance with
the decision of the Securities and
Commodities Authority No. 33 for the
year 2009, we choose Abu Dhabi
Securities Exchange (ADX) to take
advantage of the integrated services
provided by the exchange to save the
stock. We look forward to more
successes this year through this
fruitful cooperation. "
Adel Saleh Al-Ghamdi, the Chief
Executive Officer of the Saudi Stock
Exchange, the two parties have formally
agreed to enhance information and
knowledge sharing with the aim of
furthering communication, mutual
understanding and cooperation. The
signing ceremony was held at Tadawul's
headquarters in Riyadh. Amongst the
various terms of the MoU, it was agreed to
institute an exchange program for
employees of both bourses, and explore
opportunities for technology and market
data sharing, cross-listings, as well as
collaboration on market development
initiatives. Commenting on the signing,
Mr. Rashed Al Balsouhsi, CEO of ADX
said:”We are opening a gate for a new era,
a new field where we look for new
opportunities for collaboration and
cooperation. This agreement will
contribute to the already good relations
between our countries. The MoU will
strengthen the coordination between the
two markets. We look forward to working
with Tadawul in developing the business
of our common interests in our region. Mr.
Adel Al-Ghamdi, Chief Executive Officer
of the Saudi Stock Exchange, expressed
his confidence that the MoU “would serve
to strengthen alignment and collaboration
on matters of mutual interest and benefits
to both exchanges” stating that “a unified
effort in identifying opportunities and
addressing challenges will pave the way
for harmonizing the experience of market
stakeholders on both platforms,
particularly since earnest efforts have
been underway to unify capital market
policies across the GCC in terms of
corporate governance, security
registrations, trading rules, and listing and
disclosure requirements”. Al-Ghamdi
concluded, “We are glad to have
developed such an outstanding
relationship with ADX over the years, and
look forward to this exciting new chapter of
our collaboration”
PAGE 08

9. Currency
depreciation:
RBI's response:
Signposts for
other central
banks?
-D.R. Dogra, MD & CEO, CARE Ratings
The domestic currencies of various
economies, especially of emerging
market economies, have been
subject to steep declines in the last 6
months. Amongst the worst hit has
been the Indian Rupee, which has
depreciated nearly 15% during the
April-November'13 period, touching a
lifetime low of Rs.68.8/US dollar. This
fall in the currencies of emerging
market economies has been the
result of the shift in foreign investor
preference towards US markets and
dollar denominated assets with the
US Federal Reserve indicating that
improving US economic environment
could see it scale down, earlier than
anticipated, its quantitative easing
programme i.e. its $ 85 bn monthly
bond buying programme that has
been largely responsible for infusing
liquidity into the global markets and
propelling asset prices. The purpose
here is to examine what all the RBI
has done to restore confidence in the
rupee which can serve as a template
for other central banks too.
Although, fundamental factors such
as India's high current account deficit
PAGE 09
(CAD) (4.8% of GDP in the last fiscal
year) and the surge in FII outflows
from the domestic capital markets ($
12 bn between June-August following
indications of the tapering of US
economic stimulus programme),
have been the chief contributors to
the rupees steep decline, weak
investor sentiments towards India on
account of its sluggish economic
growth and widening budget deficits,
added to the weakness in the Indian
Rupee.
The decline in the Rupee emerged as
the foremost macro-economic
concern for the country. Already
suffering from high budget deficits
and given the high inelastic or
essential imports of the country, a
depreciating currency is something
India could ill afford.
Curbing/reversing the steep and
persistent fall in the rupee
necessitated various policy measures
from the Indian central bank i.e.
Reserve Bank of India (RBI) as well at
the government. To this end in the last
few months a series of measures
have been announced ranging from
adjusting interest rates to rein in fund
outflows from the country, to
measures attracting foreign inflows
into the country (FDI,FII and NRI
deposits), increasing the import duty
of non-essential items viz. gold, sale
of dollars from RBI reserves to
policies that build investor
sentiments. While some of these
measures have been temporary in
nature, having already been
reversed, some of them have long
term implications.
We have listed here the various
measures introduced by the RBI in
the last 6 months to control the rupee
depreciation and try to gauge the
overall effectiveness of these so far.
1. Reduction in the limit of
Overseas Direct Investment (ODI)
under automatic route for all fresh
ODI transactions (wef 14 Aug'13)
from 400% of net worth to 100% of
net worth of an Indian entity. This
limit applies to remittances made by
Indian Companies under the ODI
scheme for setting up unincorporated
entities outside India in the energy
and natural resources sectors. This
limit does not apply for ODI by the
Navratna PSU's, ONGC Videsh Ltd
and Oil India in overseas
unincorporated entities and
incorporated entities, in the oil sector.
This also does not apply for all
financial commitments made on or
before 14 Aug'13, in compliance with
the earlier limit of 400% of net worth
and for financial commitments funded
by way of external commercial
borrowings (ECBs).
2. Reduction in limit for
remittances made by Resident
Individuals, under the Liberalized
Remittance Scheme (LRS), from
USD 200,000 to USD 75,000 per
financial year. While resident
Individuals have been permitted to set
up Joint Venture (JV)/Wholly Owned
Subsidiary (WOS) outside India under
the ODI route within the revised LRS
limit, LRS cannot be used for
acquisition of immovable property
outside India directly or indirectly.
Earlier restriction on use of LRS for
prohibited transactions such as
margin trading and lottery continues.
3. Raising of interest rate ceiling on
long-term maturity Foreign
Currency Non-Resident [FCNR (B)]
deposits by from LIBOR/Swap plus
300 bps to LIBOR/Swap plus 400
bps for deposits with maturity of 35 years.
4. Deregulation of interest rates on
Non-Resident (External) Rupee
(NRE) Deposits. Earlier, interest
rates offered by banks on NRE
deposits could not be higher than
those offered on comparable
domestic rupee deposits. However,
in order to pass on the benefit of
exemption provided on incremental
NRE deposits with maturity of 3 years
and above from CRR/ SLR
requirements and to increasing fund
inflows, the RBI decided to give banks
the freedom to offer interest rates on
such deposits without any ceiling.
5. Restrictions on gold imports that
includes ban on import of gold
coins and medallions, 20% of every
lot of gold imported to the country
to be exclusively made available
for purpose of exports and only the
balance for domestic use. Definition
of domestic use of gold modified as
gold available to entities engaged in
jewellery business/bullion dealers
and to banks authorized to administer
the Gold Deposit Scheme against full
upfront payment. The RBI has also
put curbs on credit directed to
purchase of gold. The demand for
gold and thereby the higher gold

10. imports have been attributed to the
country's high CAD.
6. Adjusting the Marginal Standing
Facility (MSF) Rate. The MSF,
introduced in May'11, enables banks
to borrow in excess of the regular repo
auctions under LAF, but at a higher
cost. At inception the MSF rate was
designed to be 100 bps above repo
rate. This rate was increased to 200
bps above repo rate on 20 Sept'13 in
an attempt at constraining liquidity in
the system. The MSF rate has
however been bought back to the 100
bps above repo rate level. This had
helped to lower the speculative
positions being taken by some banks
in the forex market by borrowing
thought the repo window.
7. Restriction on bank borrowing
through the LAF (Liquidity
Adjustment Facility) window (from
1% of Net Demand and Time
Liabilities to 0.5%) in an attempt to
curb liquidity and thereby
speculative activity.
8. Introduction of liquidity
tightening measures through CMB
(cash management bills) auctions
every week to take out funds from
the banking system.
9. RBI decided to directly sell
dollars to three public sector oil
marketing companies to meet their
import requirements through a
special window to reduce the
pressure on the rupee. Oil
companies are the largest buyers of
dollars, as such their demand for
dollars has been a major factor driving
the exchange rate. The RBI since
early November'13 has reduced the
quantum of dollar sales to the oil
companies and they have been
sourcing a part of their requirement
DG Khan
Cement
Company Ltd
senior
management
visit LSE
- LSE Press Release
from the market.
10. Dollar sales by the RBI. The RBI
has been time and again
intervening in the forex markets by
way of dollar sales from its
reserves. The central bank has for
the period Apr-Sept'13 sold US
dollars amounting to $24.7 bn (for the
whole of FY13 the RBI dollar sales
were $16.2 bn) to curtail the
depreciation in the Indian Rupee. The
effectiveness and sustainability of this
tool to retain the value of the domestic
currency has been debated given the
limited foreign currency reserves with
the RBI. As of mid-November'13, the
RBI has in its reserves foreign
currency assets totaling $256 bn.
11. Increase in overseas borrowing
limit for banks from 50% to 100% of
their unimpaired Tier-1 Capital and
allowed banks to convert the same
into rupee and hedging the same
with the RBI at concessional rates.
12. The RBI has opened a special
swap window for banks till 30
Nocember'13 to swap foreign
currency non-resident (FCNR)
dollar deposits with a minimum
duration of 3 years at a fixed rate of
3.5% per annum.
13. The RBI has provided exporters
and importers more
leeway/flexibility in cancelling and
rebooking forward exchange
contracts. Exporters are permitted to
rebook cancelled forward exchange
contracts to the extent of 50 % of the
value of cancelled contracts. Earlier
this limit was capped at 25 %.
Importers too can rebook to the extent
of 25%. Importers were previously not
allowed to rebook cancelled forward
exchange contracts.
The government too enacted
DG Khan Cement Company Ltd
senior management visited The
Lahore Stock Exchange to
participate in the Corporate Briefing
Program. CBP is an interactive
program initiated by the Lahore
Stock Exchange under the
Corporate Communications
Department to encourage
companies to come forward and
share their financials and non
financial projects before the
members, TREC Holders, investors
and the media to abridge the
communicational gap between the
listed companies and the market
participants through this platform.
measure that complemented the RBI
measures to rein in the currency fall.
Some of the main government
measures to shore up the rupee
included raising the duty on nonessential import items viz. gold,
increasing the limit of its currency
swap agreements with Japan from
$15 bn to $50 bn and liberalization of
FDI limits in 12 sectors.
The measures enacted by the RBI
and the government, often argued to
have yielded only a limited result, has
nevertheless had an overall positive
impact on the Rupee. The rupee has
recovered from its low of over Rs.68/$
and is currently seen to be relatively
stable around Rs.62-63/$. The inflows
of funds into the country too have
increased and the RBI forex position
too has improved. India's trade
balances too have been recording
encouraging improvements in recent
month. Nevertheless, the downside
risks to the currency persist. With the
tapering of the US quantitative easing
regarded to be a given, although
timelines for the same are yet to be
finalized, the rupee could come under
renewed pressure in the coming
future. The rupee would also be
susceptible to external shocks that
could disrupt its trade dynamics i.e.
impact on the country's oil imports and
its overall exports. Continued
monitoring and proactive policy action
from the RBI and the government is
essential to maintain the value of the
Rupee.
Chief Financial Officer and Director,
Mr. Inyat Ullah Niazi, Company
Secretary, Mr. Khalid. M. Chohan
and Senior Manager Finance, Mr.
Syed Anees Hassan addressed the
participants explaining and
highlighting the financial
performance of the company. Mr.
Anees while sharing DGKCC's
financial performance stated that
energy shortage is one of the
biggest challenges faced by the
industrial sector of Pakistan. He
also mentioned that the company
has successfully installed and
operated Waste Heat Recovery
plant and Alternate Fuels project
PAGE 10

11. which are earning impressive savings
for the Company.
Mr. Anees
expressed DG Khan Cement
Company Limited (DGKC) is a
company with farsightedness. Mr.
Niazi, Director D.G Khan Cement
stated that the Company's strategy is
to stabilise and enhance its
profitability yet not neglecting the
social responsibility aspects. Mr.
Niazi shared that the Company has
plans for its expansions in Pakistan
and is also looking for a joint venture
in Africa. Mr. Niazi while addressing
the participants informed that the
Company has started two projects
with name of Lahore Green and
Multan Green. Through these
projects the Company will procure
waste from local government body
and process that for further use in
replacement of imported coal. He
expressed that the projects are
expected to boost savings for the
Company.
Managing Director and Chief
Executive Officer of Lahore Stock
Exchange Mr. Aftab Ahmed Chaudhry
was chief guest of this event while
addressing the participants stated
that the purpose of the Corporate
Briefing Program is to provide an
opportunity to the companies to brief
investors and the broker community
on the updated operational, financial
and strategic positioning of the
companies. He expressed that an
opportunity of periodical
communication through the
Corporate Briefing Program would
enable the companies to create a
strong investors following, besides,
providing the investors an opportunity
to gain first- hand knowledge from a
company's management. He stated
that LSE considers it essential for the
companies to participate in such
programs so that there is no
information asymmetry regarding our
listed companies.
Ms. Maryam Baqir, Manager
Corporate Communications LSE said
that Corporate Briefing Program
(CBP) aims to bridge the gap between
the listed companies and investor's
community and provide them with an
opportunity to share company's first
hand information. The basic goal of
the Corporate Briefing Program is to
enhance investor's understanding of
financial statements, company's short
term and long term projects. CBP is an
opportunity for investors to better
understand the economic/financial
affairs of a company which might
affect company's share price and
ultimately impact their investments as
well as investment decisions. The
LSE under this initiative will be
conducting regular programs for
different listed companies.
Management of the companies shall
brief and explain the investors about
company's assets and liabilities,
financial soundness, credit
worthiness, current and expected
revenue and growth rates.
MCX-SX
launches
investor service
centres in 4
more cities
November 29, 2013, Mumbai: In
keeping with its culture of promoting
investor protection and education,
MCX-SX, the third and India's New
Stock Exchange, launched Investor
Service Centres (ISCs) at
Ahmedabad, Hyderabad, Indore
and Kanpur, in addition to its
existing centres. The initiative has
not only increased the Exchange's
reach to investors and market
participants, but also makes it
convenient for investors and market
players to redress their grievances.
this, the MCX-SX has
operationalized total of eight
Investor Service Centres, including
the earlier ones in Mumbai, Delhi,
Kolkata and Chennai.
- MCX-SX Press Release
-
-
MCX-SX announces launch of investor
service centres at four new locations
across India – Ahmedabad,
Hyderabad, Indore and Kanpur
Service Centres to help investors with
complaint resolution and arbitration,
apart from servicing their educational
and awareness requirements
With Indian
stockbroking
heading towards
consolidation,
what are the new
trends
- Sourajit Aiyer,
Finance professional currently based in Mumbai
ISCs have Investor Grievance
Redressal Committees and will also
function as Regional Arbitration
Centres. The centres facilitate ease
of complaint registration and
speedy resolution to investors, in
addition to making available
educational material and providing
general awareness to visitors. With
The Indian stockbroking sector has
been undergoing severe challenges
given declining yields, disproportionate
rise in derivatives volumes, technology
advances, competition and an overall
disinterest of retail investors towards
this asset class. With the shift away
from high-yield cash equities segment,
the annual broking commission pool
has been fairly stagnant for the last
three years. At the same time, the
number of cash equities brokers has
largely held firm, with closure of few
brokers negated by entry of some
foreign brokers in recent years. This
indicates the increasing intensity of
competition. Secondly, the proportion
Commenting on the initiative, Mr
Gopal K. Pillai, (IAS Retd.),
Chairman and Public Interest
Director, MCX-SX, said, “One of the
most important functions of an
Exchange is to protect investor
interest and promote inclusive
growth. Especially at a time when
the retail investor participation in
capital markets has been on a
steady decline, it becomes
important to provide adequate
support and protect their interest.
We will continue to engage in such
activities and actions, which are in
line with our commitment to
transparency and investor
protection.”
of cash equities volumes controlled by
top few brokers has gone up over the
last decade. The stockbroking industry
is essentially cyclical in nature. The
correlation between broking revenues
with market returns is visible, given the
recent news emanating on this industry.
With cyclicity breeding uncertainty, this
phenomenon has rendered a natural
situation for consolidation. The purpose
of this article is to reasonably gauge
what are the trends to be expected in
this aspect.
In India, the larger brokers are currently
maintaining their leadership position on
the back of strong balance sheets,
PAGE 10

12. access to technology, differentiation in
terms of research and advisory inputs,
access to diversified products, and
distribution reach. For the smaller
brokers, strong relationships with their
critical clients remain key. Those firms
unable to scale up in a low-cost manner
or offer a critical value-differentiator to
attract and retain clients represent the
excess capacity. They may eventually
have to exit by closing or selling. The
last year or so has seen few small
brokers close as lower cash equities
volumes, entry of foreign rivals and
increase of algorithmic trading has put
viability pressures. Brokerages have
also seen some acquisition activity with
the main aim of the acquirer being to
increase its product offerings across
segments or across geographies.
Strategic alliances were mainly used
for online trading expansion, since
India's current low web penetration at
~8-9% offers ample scope for growth.
But what are the trends that the industry
can expect in the future, if the current
pressures continue? Looking at the
experience of a matured brokerage
market like USA offers critical insights.
The US broking industry (~4,000 firms)
is also concentrated, just like India.
However, the Top 10 NYSE brokers
comprised 40% of total shares traded
as of Dec 2011, which is higher than
India. Based on the commission
revenues of Schwab, Ameritrade,
E*Trade, Interactive Brokers, Morgan
Stanley, Goldman Sachs, their market
concentration has moved up within the
overall commission pool, putting
smaller brokers under pressure. USA
has seen an increase in its competitive
intensity, given less than proportionate
decline in FINRA members vis a vis the
decline in cash volumes since 2008.
So what have the US brokers done in
such a situation, and what can Indian
brokers learn from their experience?
Lower trading in high-yield cash
equities in the US has had an impact on
the proportion of this segment's income
within the commission pool and also
commissions per revenue trade of
leading US brokers. With the
depressed cash equities commissions
as well as volatile and uncertain
markets, US firms are pushing towards
a fee-based advisory model. They are
pitching a holistic financial solution for
clients with extensive product access
and trading platforms overloaded with
learning tools. As a result, the
combined client assets of leading US
brokers have grown since 2009, and
new assets shot up to its highest since
the last 5 years in 2011. They have
PAGE 11
been building advisory platforms for a
broader set of clients – across retail,
private clients, managed accounts,
ETF clients etc.
Secondly, with market pressures led to
closures/acquisitions, firms have
moved towards building specific valueproposition to retain clients. For
instance, Ameritrade is pitching its
best-in-class trading platform to attract
beginners and novice investors, apart
from active traders. E*Trade has been
pitching a whole lot of promotional
offers to bring in traders. Charles
Schwab has built its broking-cumbanking integrated platform and
Scottrade has focused on best prices.
M&As were mainly seen in USA as
firms looked to grow into universal
financial houses or offer a wider
product range, like Citigroup (Citibank
+Travellers+ Salomon Smith), Schwab
(acquired The 401K Co,
optionsXpress, Compliance 11) . A
number of smaller broking firms in the
US have closed down recently
(employing <100). No sustained
earnings due to lower volumes and
higher costs of regulations and
technology led to a shortage of capital,
and hence an inability to invest in
building a specific value-add. In short,
those capable to invest in building a
value-add, and those able to build a
differentiator, have a better chance of
prospering in the industry under
pressure. Thirdly, brokers are seeking
sustained revenue growth using a
scalable approach across product
categories and clients types – to utilize
economies of scale and scope. US
brokers have been building a
diversified product suite to increase
client trading activity across segments,
like Schwab and Ameritrade's
acquisitions of OptionsXpress and
ThinkOrSwim for option strategies.
Differentiation has meant pursuing
differentiated models as per client
types: long-term, active, self-driven
traders. Some have scaled up using
RIA networks, an experienced talent
pool using knowledge and deep client
relationships. This included automation
to reduce human intervention and
handle more business with low
incremental cost, technology tools like
analytics, faster access, research
tools, mobile/tablet platforms, and DMA
and algorithmic trading. Quality
processes and platforms have been
key differentiators as all efforts have
been focusing to ensure repeat
business. Client referral programmes
have also been a critical tool, using
word of mouth referrals. Schwab's retail
referral raised $11bn in new assets in
2011. Lastly, mega deals do not seem
to have yielded much value in the US.
Hence, M&As were driven primarily for
superior technology platforms. But
most major deals are yet to show
results as clients do not necessarily
stick on post-acquisition. Integration of
the two firms has often been difficult,
and most have been existing
separately within the combined entity.
This makes it difficult to achieve
economies of scale for revenue growth
- its very purpose. Going forward,
acquisition deals are mainly expected
in small transactions focusing on
specific, niche competencies. So what
is the scenario for consolidation in India
going forward? There is ample scope
for consolidation in India as the sector
is still highly fragmented and
profitability pressures are expected to
continue. Firms with varied offerings,
strong research and advisory, balance
sheet strength, technology capabilities,
scalable processes and deep
relationships should dominate
eventually, and garner a larger share of
the incremental business once market
activity picks up. Remaining players will
either close or sell as business
becomes unviable at the current scale.
Consolidation process should produce
stronger domestic players to counter
foreign competition; The resultant
competition amongst equal peers could
also improve overall customer
experience and satisfaction levels,
which could bring in further new clients
into equities.
·
India may eventually
restructure with universal one-stop
financial shops and pure brokers
offering value-adds.
·
Need for technology for
sophisticated trading platforms,
automation and algorithms may drive
deal flow.
·
Depth of client relationships
will be key for client stickiness,
retention and referrals. Clients will
move on if dissatisfied with the service,
hence a need to leverage strong
personal relationships for referrals.
·
Build fee-based businesses to
minimize the impact of cyclicity on corebroking income and grow the product
suite.
·
Web/mobile platforms hold
further potential given its advantages of
convenience, low costs and fast
execution.
·
Since cost pressures in
expanding own infrastructure in this
cyclical business, focus will be on
scalable, asset-light operating models.

13. CDC launches Investment Portfolio Services for Government Securities
Press Release
CDC is the only non banking institution entrusted by the State Bank of Pakistan to provide custody and settlement services of Government Securities to Asset
Management companies and Retail Investors through Real Time Gross Settlement. Real Time Gross Settlement (RTGS) will enable CDC to safe keep Government
Securities acquired by different funds under its own custody rather relying upon other banks. At the same time, the facility will improve efficiency of our trustee operations
by reducing the settlement time and help mutual funds maintain their complete securities portfolio under one roof.
The current range of GOP debt securities include Pakistan Investment Bonds, Treasury Bills and Ijrah Sukuks, issued by the State Bank on behalf of the Government of
Pakistan. Previously these securities were only available by the Bank to a certain category of corporate clientele and the sale was directly handled by Bank's Treasury
Department. General investors will also be able to invest in government securities by opening Investor Portfolio Securities (IPS) account with CDC through partner
brokers. IPS account will enable them to maintain custody of their investing securities directly with CDC and avail high returns with zero investment risk.
Bhutan pact opens doors to S Asia
nationmultimedia.com
That advice came after the signing of an agreement on economic cooperation in Bangkok yesterday by Bhutanese
Economic Minister Lyonpo Norbu Wangchuk and Commerce Minister Niwatthumrong Boonsongpaisan covering trade,
investment, tourism, construction, healthcare, education, energy, logistics and the development of small and medium-sized
enterprises. The two countries agreed to set up a joint trade commission to exchange views and discuss strategies to
promote trade and investment every year. Niwatthumrong said closer ties with Bhutan should help open up more trade and
investment opportunities to Bhutan for Thai businesses, as well in other countries that Bhutan has bilateral trade agreements
with. Those countries are Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, which are
members of the South Asian Association for Regional Cooperation and the Bay of Bengal Initiative for Multi-Sectoral
Technical and Economic Cooperation, a grouping of Bangladesh, India, Myanmar, Sri Lanka, Bhutan, Nepal and Thailand.
Thai investors could use Bhutan as an investment base to sell goods in the domestic market and to ship to other countries, as
Bhutan has tariff privileges with many nations.
Projects that Bhutan has highlighted for foreign investors include a 10-gigawatt power plant that could be tripled in capacity in the future to supply the domestic market
and export electricity to India and other nearby countries. Bhutan is also open to investment in many businesses that Thais have high potential in such as healthcare,
education, resorts and restaurants, and other tourism and service businesses. The Bhutanese government is studying developing a hydropower plant for exporting
electricity to other countries, and organic horticulture, as well as health and tourism, fields that Thais are experts in. Indians are the largest group of foreign investors in
Bhutan. Thailand's trade with Bhutan should grow stronger in the following year thanks to the closer ties. Shipments from Thailand to Bhutan should also increase from an
average of about US$150,000 (Bt4.7 million) a year. Exports from Thailand to Bhutan grew by 98.97 per cent this year. The Commerce Ministry's data showed average
trade between Thailand and Bhutan was worth $12.10 million in the past five years. Bhutan is Thailand's 153rd-biggest trading partner. Thai goods with sales potential in
Bhutan include textiles, automobiles and parts, wood and products, plastic products, fabrics, and furniture and parts.
DSE, KPAGEC mull gold trading on stock exchanges
dhakatribune.com
The Dhaka Stock Exchange (DSE) and Kunming Pan Asia Gold Exchange Co. Ltd (KPAGEC) are working on introducing gold trading on both the stock exchanges. To
this end, DSE President Ahsanul Islam recently signed a letter of intent in China to promote the joint development of precious metal market based on Dhaka of
Bangladesh and Kunming of China, DSE said in a statement on Wednesday. The two exchanges will jointly analyse the trading feasibility in both the exchanges to trade
the gold and its derivatives denominated in renminbi (RMB), taka and US dollar.
The agreement came when a DSE delegation attended a three-day conference of Bangladesh-China-India-Myanmar (BCIM) Economic Corridor Connectivity Forum
ended on November 11 at Fuzhou, China. The DSE president proposed the innovative financial products – Infrastructure Development Fund for the BCIM Forum, Islamic
Financial Products like Sukuk, BCIM 50 Index, Currency Swap based on Gold standard, Regional Commodity Exchange like Gold Exchange – to provide financial
support for the establishment of BCIM countries.
Clearing and settlement yet to go online
ekantipur.com
The clearing and settlement of share trading is yet to be done online even though CDS and Clearing (CDSC) has started dematerializing share ownership certificates.
CDSC took over the task of clearing and settlement from the Nepal Stock Exchange (Nepse) about a year ago. The central depository system (CDS) was launched to end
the manual system of clearing and settlement of share transactions, but it is still being done the old way. The necessary regulation is in place, but there are not enough
depository participants (DPs) and clearing members (CMs) to conduct clearing and settlement online. DPs convert the paper share certificates into digital format while
CMs help in the clearing of share trading online. While the number of CMs has grown to 25, the number of DPs is just 10. According to CDSC, only 6,561 share certificates
have been digitalized so far as the listed companies have not shown the necessary eagerness to digitalize the share certificates they have issued to their shareholders.
“Stockbrokers are yet to acquire their DP licence as the regulation requires them to have a net worth of Rs 10 million, so they are reluctant to become Dps,” said a CDSC
official. “The number of CMs was also negligible initially as they were required to make a cash deposit of Rs 1 million. After the rule was relaxed allowing them to submit a
bank guarantee instead of cash, many brokers came forward to become CMs.” CDSC has not said when the task of clearing and settlement will be done online. After the
bank guarantee system was introduced, 25 out of the 50 stockbrokers obtained CM licences. Before that, only two brokers had acquired the permit. However, brokers
have not shown much interest in becoming DPs. The only companies that have obtained DP licences are merchant bankers. They are Civil Capital Market, Ace Capital,
Stock Management & DP, Nabil Investment Banking, NIBL Capital Market, Laxmi Capital, Everest Bank, Siddhartha Capital, NMB Capital and Bank of Kathmandu.
PAGE 14

14. S&P Dow Jones to Upgrade UAE to Emerging Market Status
zawya.com
S&P Dow Jones said that the UAE's current foreign ownership limit of 49 percent is satisfactory and there is an expectation that it will be relaxed in
coming years. CEO of Abu Dhabi Securities Exchange , Mr. Rashed Al Baloushi welcomed the recent upgrade saying: "We are delighted to have
the UAE market upgraded to emerging markets status by S&P Dow Jones. We believe the upgrade reflects international investors' confidence in
our markets and their satisfaction with what we have accomplished."
"This decision firmly establishes the UAE market on the emerging markets growth map in the minds of global institutional investors. It certainly
reflects a growing realization of how far our economy and financial markets have developed in recent years." Added ADX CEO.
S&P Dow Jones indexes are used as investment benchmarks by some fund managers. In June this year, index compiler MSCI said it would
upgrade the UAE to emerging market status from May 2014. The UAE markets are already classified as emerging markets by FTSE, Russell
Investments, and S&P.
ISE introduces new trading software
brecorder.com
Islamabad Stock Exchange (ISE) has introduced new trading software to upgrade the trading platform, as per the modern day requirements and match the demands of
post demutualisation scenario, which involves investors from international stock exchanges.The mock trading at the new system, which has been named 'Islamabad
Electronic Exchange System' (IEES) was held here on Tuesday in the ISE building and the TREC Holders of ISE were informed about the features of the new system.
The new system has been developed by M/s. Catalyst IT Solutions which is a renowned technology solutions provider to financial industries globally. The trial of IEES
would continue for 10-15 days after that it is expected to become operational, making ISE the first and currently the only demutualised stock exchange to introduce a
modern electronic trading platform for its members. "It will be a milestone in the history of ISE providing multiple options to the investors," Mian Ayyaz Afzal, Managing
Director ISE said.
He informed that the system will provide online, mobile and SMS trading facilities for the clients of the TREC Holders. "The new trading system with multiple and
advances features will enable the ISE to be reap up the benefits of the information technology and to be an Exchange having latest trading software," Afzal added. The
TREC holders were informed that with the help of new system they can develop business relations with the brokers at the international stock markets supporting the two
way trade. The experts told the participants that clients and investors at international stock markets can also participate in the ISE through the new system, allowing the
TREC holders of ISE to develop partnership with the brokers of stock exchanges in other markets. "This efficient and more transparent system of trade execution will
enhance the confidence of the investors in ISE," the officials of Catalysts IT said. Syed Ali Mehdi, Chief Business Analyst of Catalyst IT, said that the new system includes
portfolio management system, back office facility, risk management features, order routing, data services, direct market access for local, foreigner and institutional
clients and secured connectivity features and the new system can be ranked at par with any trading system around the globe. Imtiaz Haider, Commissioner, Securities
Market Division, SECP said, "demutualization of our stock exchanges has been completed and we are now moving towards the phase where the stock exchanges have
to attract strategic investors." "Post-demutualization, things will change the two key areas where change is inevitable ie, our governance structure and efficiency of
systems, processes and price discovery mechanisms," he added.
"For efficient working and to keep shareholders satisfied and for the exchanges to stay competitive, there will be an urgent need to improve service delivery,
transparency and profitability," Haider said. He further said that the automation brings in quicker turnaround times, ease of access, seamless transactions, better
availability of information, etc. It will be imperative for the exchanges to invest, and invest well, in revolutionizing their IT infrastructure. He also said that the securities
markets should also consider to achievement of the economies of scale. Imtiaz Haider said that with the stock exchanges becoming for-profit corporations have
rendered the managements accountable for their actions and there will be a greater need for improved standards of governance and disclosure. The introduction of
strategic investors possessing specialised expertise, automation solutions and precious capital will further result in the stock markets jumpstarting towards new heights.
With regard to efficient working, to keep shareholders satisfied and for the exchanges to stay competitive, there will be an urgent need to improve service delivery,
transparency and profitability. Key to these improvements in efficiency is the idea of better price discovery. "If we have the best price available, consistently across
Pakistan, the buyers and sellers will be able to trade with confidence which will lead to growth and development of our capital market and the exchanges. These
developments will address the needs of all stakeholders, including shareholders, market intermediaries, investors, the general public and regulators. The single, most
important catalyst for the exchanges, in my opinion, will be taking advantage of automation technologies," Imtiaz added.
He further said that the automation brings in quicker turnaround times, ease of access, seamless transactions, better availability of information, etc. It will be imperative
for the exchanges to invest, and invest well, in revolutionizing their IT infrastructure. He also said that the securities markets should consider achievement of the
economies of scale. "When I say "invest well", what I mean is that IT solutions should be future oriented, user-friendly, adaptable to changing requirements, reliable and
most importantly transparent. With such advantages being exploited, the exchanges will witness increased volumes because the investors will have greater confidence
due to better price discovery through instantaneous access to information. Without this, the growth factors will not multiply as rapidly as the management of the
exchanges, their shareholders, market intermediaries, investors and regulators would like," he added. Imtiaz Haider said that ISE must avail the true potential existing in
the new trading system.
In the end, Muhammad Rashid Zahir, Chairman ISE Board of Directors, during the vote of thanks said that the new trading system will give more confidence to ISE to
improve its working and upgrading its IT infrastructure. He congratulated all stakeholders and thanked the Commissioner SMD for his participation in the event.
Goldman upgrades India to ‘marketweight’, raises Nifty target
livemint.com
Goldman Sachs upgraded its view on India to “marketweight”, with a target for the broader National Stock Exchange
(NSE) index Nifty of 6,900 points. Goldman noted optimism over political change is trumping economic concerns, given
what the bank says are expectations that the opposition Bharatiya Janata Party (BJP), led by prime minister candidate
Narendra Modi, could prevail in parliamentary elections due by May 2014.
Goldman also noted that external capital account pressures have moderated for now, and cited signs of a cyclical pick-up
and structural improvements in the economy.
The investment bank likely noted the earnings outlook is stabilizing, while noting that retail redemption pressures could
moderate, among the factors behind its upgrade.
Goldman says technology, healthcare, and energy are its top sectors.Goldman says it likes technology stocks including
HCL Technologies Ltd and Tech Mahindra Ltd, oil and energy scripts such as Reliance Industries Ltd, Bharat Petroleum
Corp. Ltd and Coal India Ltd, banks including Yes Bank Ltd and IndusInd Bank Ltd and select auto and cement stocks.
The US bank also included some mid-cap infrastructure stocks which are trading at inexpensive valuations such as Adani Power Ltd, NHPC Ltd, materials stocks like
Grasim Industries Ltd, and industrials stocks like Container Corp. of India Ltd and Adani Ports and Special Economic Zone Ltd.
PAGE 15

15. HBL to launch financial literacy programme
dailytimes.com.pk
Habib Bank Limited (HBL) has partnered with Idara-e-Taleem-O-Aagahi (ITA) a civil society organisation to participate in Children’s Literature Festivals (CLF) all over the
country.
With this partnership HBL will launch its Financial Literacy Programme, through which it aims to educate children from all strata of society on basic financial concepts in
interesting way, said a statement of the Bank on Monday.
It said the partnership between HBL and ITA would cover three basic objectives, explain the importance of savings to children, educate privileged and under privileged
equally and inculcate the habit of early savings among children.
Keeping in mind the large number of Pakistan’s unbanked population, CLF programmes will cater to both genders, of all age groups, from different sections of society, the
statement further pointed out. pr
Sri Lanka : CSE Officials disclose Environmental Resources Disclosure a Week Later
lbt.lk
Amidst Colombo Stock Exchange’s (CSE) regulator - Securities and Exchange Commission (SEC) having early disclosure rules for listed companies and their directors
and major investors who buy large parcels of stocks in Colombo Bourse, this time industry analysts and investors outline that Colombo Stock Exchange officials had
delayed a disclosure about a most controversial stock ‘GREG’ in the last week.
Meanwhile stock market veteran investors also note that why it had been not disclosed by Environmental Investments PLC (GREG) to Colombo Stock Exchange the
company's name change in an earlier an immediate filing, although in the latest annual report of the company on 26th August 2013 it had been mentioned that company’s
board of directors resolved to change the name of company to ‘Century Lanka Investments PLC’ which was hoping to seek shareholder approval at Annual General
Meeting (AGM) on 27th September 2013.
Accordingly investors and the market analysts are concerned “Why the Colombo Stock Exchange (CSE) delayed a major disclosure of a name change of Environmental
Resources Investments PLC that was faxed to CSE at 10:34 A.M. on 23rd of October 2013 by PW Corporate Secretarial (Pvt) Ltd which was later disseminated by CSE
Officials only on 31st October 2013.
When CSE officials were inquired on the delay of the disclosure CSE officials were not available for comments on the matter in confident manner though they outlined the
fax document 'Was Misplaced and was Later Founded'.
“This is very absurd they all the time sent us letters, and warn us to disclose early about our transactions and crucial information about companies but this time Colombo
Stock Exchange itself had delayed the dissemination of information to shareholders and the general public” a top investor and a director of a listed company told LBT
adding that it is indeed questionable since Environmental Resources Investments PLC had come to the eyes of watchdog at several occasions whilst even the
company’s earlier directors were in the spotlight of the watchdog.
“Regulator has implemented several rules for investors and listed companies but if Colombo Stock Exchange itself is doing such mistakes it is arguably questionable
whether the regulator have implemented rules for CSE officials to disclose filings immediately that are faxed timely by companies” another investor questioned on the
grounds of anonymity.
“We are surprised how Colombo Stock Exchange officials themselves can be such irresponsible although they talk about a disciplined stock market and a disclosure
based trading market in the country” another investor from Matara pointed out.
The disclosure released by Colombo Bourse said that Environmental Resources Investments PLC (ERI) or the famous stock counter GREG that the name of the
company had been changed to Lanka Century Investments PLC in order to that accurately reflects its corporate identity. Company further said that the disclosure is being
made in terms of the section 8 of the listing rules of Colombo Stock Exchange’s Listing Rules.
In the filing company further said that approval from Shareholders were obtained at AGM held on 27th September 2013 and also from the Registrar General of
Companies.
AKD Securities organises seminar on investor awareness
brecorder.com
One of Pakistan's leading brokerage houses, AKD Securities Limited and Karachi Stock Exchange launched a nation-wide investor awareness campaign from
Hyderabad recently. A large number of businessmen, doctors and salaried professionals attended the seminar which clearly showed the potential in the city which is also
known as mini Karachi.
The seminar commenced with the presentation of facts and figures of the past performance of KSE by Sani-e-Mehmood, Head of Marketing, KSE which was followed by
a very in-depth analysis of the stock market by Farid Alam, CEO, AKD Securities Limited.
The seminar was extremely interactive as the major part of the event was taken by the question and answer session. The audience showed a lot of interest but at the
same time raised questions which reflected lack of confidence and trust deficit as in the past illegal brokers have managed to get away with fraudulent activities in
Hyderabad.
"AKD is a name which enjoys a decent reputation internationally and we have been building bridges of trust since past many years", assured Farid Alam, while answering
a question.
"Two hours and thirty minutes away from Karachi, Hyderabad is no different from the city of lights it is just that in the past no brokerage house has marketed stock trading
in an organised manner", said Alam while talking to the audience.
"Such seminars are much required to increase the investor base and the trading volumes of Karachi Stock Exchange. Other brokerage houses should also play an active
role in creating awareness amongst the masses. It is not an overnight process but all the stakeholders together can make the journey easy", said Alam.-PR
PAGE 16

16. MAJOR
SAFE MARKETS
November 2013
DHAKA STOCK EXCHANGE
DSI
BOMBAY STOCK EXCHANGE
SENSEX
NATIONAL STOCK EXCHANGE
S&P CNX NIFTY
NEPAL STOCK EXCHANGE
NEPSE
STOCK EXCHANGE OF MAURITIUS
SEMTRI
COLOMBO STOCK EXCHANGE
ASI
KARACHI STOCK EXCHANGE
KSE-30
KARACHI STOCK EXCHANGE
KSE-100
*Please note that the closing index values for every day have been quoted for all the indices.
PAGE 15

17. The 'cap' confusion
Business Standard
Different agencies define large, medium or small cap, according to their own methodology. Understand them better.
We humans find comfort in classification and segmentation. That is why many of us prefer the well-demarcated aisles in supermarkets, rather than popping
into the local grocer's cluttered store. We extend the same desire to investing and consider it especially important when there are over 4,000 listed stocks and
hundreds of mutual fund (MF) schemes.
A common method of classification is the market capitalisation (MC)-based method, wherein stocks/funds are divided into large-cap, mid-cap and small-cap.
MC is the product of the market price and the number of equity shares outstanding. It may be computed either on a total or a free-float basis. Many investors
have a clear preference regarding the category they would like to invest. While some stick to large-caps, others gravitate towards mid-cap and small-cap
stocks. However, their definition varies widely. For instance, the Bombay Stock Exchange (BSE) considers stocks falling within the first 80 per cent of the freefloat market capitalisation as large-caps and those within 80-95 per cent as mid-caps while computing their indices. The National Stock Exchange (NSE)
considers stocks falling within 75 per cent and 95 per cent of the free-float market capitalisation as part of the eligible universe, while computing the NSE
MidCap Index.
Even mutual funds differ markedly. For instance, Birla Mid-Cap Fund uses an absolute filter of stocks with a market-cap between Rs 150 crore and Rs 1,500
crore. DSP Micro Cap's universe constitutes of stocks that are not part of the top 300 companies by market capitalisation. What constitutes small-cap for some
may be micro-cap for another.
Here's some solution to the segmentation conundrum:
STRIKE A BALANCE: Rather than obsessing over the the classifications, investors could opt for clear options within each category. For instance, Hindustan
Unilever and Jyothy Laboratories are large and mid-cap stocks, respectively, by most definitions. Owning both will give investors an exposure to two good
companies across the market-cap spectrum. If you prefer mutual funds, choose 'go-anywhere' funds, which operate without any market-cap bias. However,
even in these, the fund's philosophy will lead to a tilt in some direction. Fidelity Equity Fund, for example, is primarily large-cap oriented, while Reliance
Regular Savings is mid-cap oriented, though both profess to be market-cap agnostic. Choose the one whose style you are comfortable with.
CHOOSE INDEX FUNDS/ETFS: These mirror specified large and mid-cap indices and offer a low cost option to gaining exposure to a variety of stocks at one
go. In fact, undertaking monthly SIPs in one Nifty/Sensex-related exchange-traded fund (ETF) (example Benchmark NiftyBeES or Franklin Index Fund –
Sensex) and one mid-cap ETF (say Benchmark Junior BeES or MOST Midcap ETF) could be good enough. Any change in the underlying index's composition
automatically leads to a rebalancing of your holding. There is also no fund manager-related risk.
CHOOSE APPROPRIATE FUNDS: Ensure the large or mid-cap fund you are investing in is true to its mandate. For instance, Franklin Bluechip strictly
ensures over 80 per cent of its corpus is invested in large-cap stocks and, hence, is a good fund for those seeking a large-cap fund. Funds which frequently
modify their mandate end up confusing and disappointing investors.
BE COGNISANT OF BIASES: Often, the preference for one category over the other may be due to 'recency bias'. If stocks or indices belonging to a certain
category outperform for some time, investors gravitate towards that class. For instance, mid-cap indices outperformed large-cap indices for a large part of
2010. This led to heightened interest for mid-cap stocks. Similarly, during the market correction of 2008, large and well-known companies fell less than the
rest, thereby creating an illusion of safety, leading to a penchant for large-caps.
Continuous Listing Requirements
(Source: CBSL)
Colombo Stock Exchange (CSE) is currently examining the feasibility of making its continuous listing requirements (CLR) permanent. At present under its
main board listing requirements, there needs to be a 25% minimum free float; and in the case of listing in the Diri Savi secondary board, the requirement is a
minimum 10% free float. However, what more often than not happens, after an initial public offering, where CLR are conformed to, subsequently however the
free float is diluted due to strategic interest in the company, and the requirement of a 25% minimum free float in the case of main board listing and 10% in the
case of Diri Savi, is, therefore, more often than not, observed in the breach. Contentious issues such as which shareholder/shareholders should shed
his/their's “excess” equity stake/stakes in order to conform to CSE's CLR, are among the matters that the CSE is grappling with, before mandating CLR. A
plethora of new listings, some mandatory and some voluntary, are now before the CSE. Among the mandated listings are the need for registered finance
companies to list by end June, banks by end December and insurance companies by next year.
12 YEARS OLD
Grants McCann Erickson's Public Relations Department celebrated its 12th anniversary.
CREDIT CARDS SHRINK
The number of active credit cards in circulation as at end of last year decreased by 42,769 (5.2%) over that of November, and continued with this decline vis-àvis the end December 2009 figure, a shortfall of 62,035 (7.4%) over that figure of 840,509. However, the outstanding credit card balance in the review period
increased by Rs. 853 million (2.8%) to Rs. 31,616 million month on month in December, and marginally increased by Rs. 241 million (0.8%) when compared
South Asian Federation of Exchanges (SAFE)
with the end December 2009 figure of Rs. 31,375 million.
SAFE Secretariat
RICE IMPORTS UP 132%
Colombo tea auction prices last November declined by96-W, Khyber Plaza, 2nd Floor,
4.5% year on year (YoY) to US$ 3.38 a kilo, whilst tea production for the year increased by 13.1% YoY
Fazal-ul-Haq Road, Islamabad-44000, Pakistan.
to 329.4 million kilos.However rice import prices in the review period increased by 132.3% YoY to US$ 849.10 per metric ton (pmt) C&F. Similarly white sugar
prices increased by 22.6% YoY to US$ 709.3 pmt C&F and crude oil by 7.2% YoY to US$ 84.80 per barrel C&F.But wheat prices in the review period declined
Tel: +92 (51) 282 6763 | Email: info@safe-asia.com
by 11.8% YoY to US$ 225.50 pmt C&F. (Source: Central Bank of Sri Lanka)
Fax: +92 (51) 280 4215 | URL: www.safe-asia.com