out by 2007, there is a view that this volatility is a manifestation of structural weakness in the front line regulator i. e. the stock exchange, overleveraging of the market, and margin calls which triggered heavy selling, uneasiness with delays in the settlement of the continuous funding system ( cfs ) which is expected to be modified and eventually be replaced by margin financing to do away fully with badla – a form of short selling – tightening of some regulations, introduction of universal identification number for brokers etc. secp has launched a probe of short and blank selling and has proposed measures to boost investor confidence by tightening the risk management practices at the stock exchanges, addressing issues of netting of open market positions across three markets, mark to market profit / loss, etc. barring these aberrations, the stock market has been exceptionally buoyant benefiting from the ( i ) increased investor confidence in economic policies and high corporate profitability, ( ii ) increased supply of scrips augmented by privatization of large government owned companies such as the recent additions to the market of issues of the pakistan telecommunication corporation ( ptc ), muslim commercial bank ( mcb ), and the large issue of a power project, namely the hub power company ( hubco ), which has been actively traded ( iii ) renewed interest of a large number of buyers of shares, ( iv ) bright prospect of reaping dividends and capital gains, ( v ) foreign portfolio investments and ( vi ) continuous efforts to strengthen the legal and regulatory framework of the, securities markets. the events in equity markets not only provide an opportunity for self correction of overvaluation but also will help strengthen the governance of the exchanges. the stock market is expected to further receive a boost from the continued implementation of the privatization program, issuance of gdrs by ogdc – a large utility company – and as the banking sector offloads more of their shareholding to markets, and companies initiate ipos to meet their financing requirements. to restore investor confidence, the regulator is encouraging systematically the strengthening of the governance of exchanges by restructuring of boards and appointment of independent management, encouraging the demutualization of exchanges, while strengthening risk management systems that have involved the introduction of t + 3 settlement and circuit breaker limits, proper capital adequacy for brokers etc. investor confidence will be further enhanced as the code of corporate governance has been incorporated into the listing regulations of stock exchanges, there is enhanced vigil

governor title date event venue : mr. tariq bajwa : remarks by the governor, state bank of pakistan : april 19, 2019 : 23rd zahid husain memorial lecture : sbp head office karachi remarks by the governor, state bank of pakistan 23rd zahid husain memorial lecture 19th april 2019 honorable chief guest justice ( r ) nasir aslam zahid, learned speaker dr. zhou xiaochuan, distinguished guests, ladies and gentlemen! 1. i feel honored to welcome you all to the 23rd zahid husain memorial lecture today, on “ lessons from the role of people ’ s bank of china in china ’ s economic rise ” by dr. zhou xiaochuan, former governor of the peoples bank of china. 2. the zahid hussain memorial lecture series is one of the most prestigious events organized by the state bank of pakistan every year, and serves a dual purpose : it symbolizes our humble effort to acknowledge the services page 1 of 7 rendered to the nation by mr. zahid husain – the first governor of the state bank. and second, the lectures offer an opportunity for intellectuals, academics and policymakers to come together and engage in healthy and constructive debates on contemporary economic issues and challenges. while we may be in variance with some of the viewpoints expressed by our eminent speakers, we nonetheless wholeheartedly welcome the opportunity to learn from their understanding and interpretation of complex economic interactions, and their efforts to deal with the identified issues. ladies and gentlemen! 3. but before i introduce our eminent speaker, please allow me to briefly recognize the services rendered to our country by mr. zahid husain. as we are all aware, this country faced incredible challenges immediately after independence. in the words of quaid - i - azam muhammad ali jinnah, we got a ‘ mutilated, truncated and moth - eaten ’ country. 1 pakistan ’ s chances of survival did not appear encouraging during those earlier years. it was during these testing times that mr. zahid husain stood out amongst the dedicated lieutenants of our founding father. 4. mr. zahid husain was among the principal architects of pakistan ’ s financial and planning system. his commitment to public service and nation - building, and his resolve and ability to overcome multiple, significant challenges faced by the new - born country, set him apart from “ truncated state, divided nation ” ( ch. 2, p. 40 ‐ 60 ) from “ the struggle