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The Karachi Stock Exchange has made amendments to the listing regulations regarding transfer pricing and corporate governance.

According to the KSE on Monday, the management had already sought permission from the Securities and Exchange Commission of Pakistan for these amendments. According to the amendments, Chapter XII captioned “Transfer Pricing” and Regulation 38 (1) to (11) thereunder have been deleted while in Chapter XI captioned “Code of Corporate Governance” after sub-regulation (xiii) of Regulation 37, a new sub-regulation (xiii a) have been added.

Under the new sub-regulation (xiii a), all companies registered under the Companies Ordinance, 1984 will place before the board of director all the transactions with the related parties for review and approval. Similarly, the detail of all related party transactions shall be placed before the audit committee of the company under the sub-regulation (xiii a).

The board of directors of a company shall approve the pricing methods for related party transactions that were made on the terms equivalent to those that prevail in arm’s length transaction only if such terms can be substantiated.

Every company shall maintain a party-wise record of transactions in each financial year entered into with related parties in that year along with all such documents and explanations.

Karachi Stock Exchange (KSE) investors are compelled buying and selling shares on cash, as the badla financing facility is scarcely available and the market is not getting any support.

KSE members and analysts told that despite purchases being made from the support fund, one of the reasons for market remaining under pressure is the non-availability of financing facility, besides lack of confidence of the investors and asking for submission of the accounts of some brokers by SECP. Delineating on the second reason for market remaining under pressure analysts told after initial upbeats, the market slipped into the grip of bearish trend due to banks selling CFS defaulters’ mortgaged shares in the market. Analysts further said that the market could bounce back through kicking off trading in futures and easing out the facility of Badla financing.

By Khalid Qayum

Jan. 13 (Bloomberg) -- National Investment Trust, Pakistan’s biggest money manager, bought stocks for the first time from a 20 billion rupee ($250 million) fund announced this month to stabilize the market after a 58 percent slump last year.

“We bought shares for the first time today and will continue to buy at good rates and values,” Tariq Iqbal Khan, chairman of the state-owned National Investment, said in a telephone interview from Karachi today.

Pakistan shares fell for 13 consecutive sessions starting Dec. 15 when the stock exchange ended a trading curb that had prevented the benchmark index from falling below its Aug. 27 level of 9,144.93 points. The drop in the benchmark index last year was the first annual decline in seven years.

Pakistan’s benchmark Karachi 100 Index rose 0.3 percent to 6059.09 at the 3:30 p.m. local-time close. The gauge fell 1.7 percent yesterday after a 6.8 percent increase in the previous four sessions after National Investment said it would buy shares.

National Investment Trust said on Jan. 2 it planned to buy shares in eight companies through the so-called State Enterprise Fund. National Bank of Pakistan, the country’s biggest lender by assets, Employees Old-Age Benefits Institution and State Life Corp. of Pakistan are among investors in the fund.

Oil & Gas Development Co., Pakistan’s biggest explorer and among the eight companies the fund is investing in, rose 2.4 percent to 53.75 rupees.

Rocked by Protests

The stock market was rocked by protests last year as police surrounded Pakistan’s biggest bourse to quell violence by investors angry over the price curbs. Authorities were seeking to avoid a repeat of July, when hundreds of investors stoned the exchange and shouted anti-government slogans.

The exchange still has a 5 percent daily trading limit for its key measure, a restriction that existed before Aug. 27.

The stock market’s gain this year follows a $7.6 billion loan agreement with the International Monetary Fund to help restore investor confidence and allow the nation to keep servicing its foreign debt. The country was forced to seek IMF aid after its foreign-exchange reserves shrank 75 percent and a group of donor countries declined to provide funds.

ISLAMABAD: The National Assembly (NA) Standing Committee on Finance on Friday deferred the approval of the Stock Exchange Bill, 2008 (Corporatisation, De-mutualisation and Integration), presented by the Finance Ministry and the stock market regulator.

The committee has now decided to invite the chairmen of Karachi, Lahore and Islamabad stock exchanges and the chairman of the association of small investors in the next meeting. The committee is looking to the input of these key stakeholders before it clears the bill for its formal approval by the NA. The NA finance committee was meeting in the Parliament House with Fauzia Wahab in the chair. The finance secretary and the Security and Exchange Commission of Pakistan chairman were also present.

Finance Secretary Waqar Khan informed the committee members that the bill had been approved twice earlier, both by the previous government and the caretaker government. He said it had been discussed in detail and requested the committee to approve it, as it had already been delayed by a year. However, the committee members objected to the bill’s approval, saying passing it without proper consideration would be unjust. The members, notably Kashmala Tariq of the Pakistan Muslim League-Quaid and Abdul Rashid Godil of the Muttahida Qaumi Movement, said the committee must consider opinions of all stakeholders on the bill before its approval. The committee chairwoman agreed to the members’ demand, and adjourned the bill’s approval until the next meeting.