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Stock market capitalisation reaches $70b mark: Shah

LAHORE: Advisor to the Prime Minister on Finance, Dr Salman Shah has said capitalisation of the Karachi stock market has reached the level of $70 billion, about 50 percent of country's GDP of $145 billion.

"We are working to get it equal to country's GDP size," he said while talking to a group of local journalists here on Saturday.

He said that big companies should list themselves on the stock exchanges to raise equity instead of depending on banks for loans.

Dr Salman Shah said that Pakistan had the potential to emerge as the hub of manufacturing and Information Technology in the region like China and India. He said that federal government had made 22 percent increase in the allocation for education sector this year, adding that provinces were also making similar raise in the funds for this vital sector.

Similarly, he said, there was no need to increase interest rate or exchange rate adjustment to make products internationally competitive. Enhanced productivity could help achieve this objective significantly, he added.

He said that the size of country's GDP had risen to the $145 billion from $70 billion in the year 1998-99.

"Had we constructed more dams after Tarbela, our economy could have grown 10 times," he added. He said that bumper crops of wheat, cotton and sugarcane had resulted in the injection of Rs 250 billion, Rs 180 billion and Rs 85 billion respectively in the rural economy of the country.

He said that good return for agricultural produce has also contributed to hike in the prices of the food items.

Quoting a report from the latest issue Newsweek, Dr Salman Shah said that the average world inflation of food items at present stood at 23 percent. He said that the use of maize, sugarcane and palm oil for bio-diesel production, had also resulted in the price hike of these commodities.

He hoped that the prices of palm oil that recently touched the level of $815 per tonne had started declining.

Responding to a question, he said that the steps being taken by the government would help bridge the gap between power generation and consumption in the country.

"We are expecting additional 800-900 Megawatt of power within a month due to authorization of Captive Power Plants (CPPs) to sell electricity, installation of two rental power plants and increased inflows in the rivers due to glacial meltdown," he told

He urged the consumers to adopt power conservation techniques. Dr Salman Shah said that the annual growth of power consumption that stood at 3 percent in 2003-04 has shot up beyond the levels projected by the planners. Most of the power consumption rise was mainly due to increase in the use of consumer durables like air conditioners, TVs and washing machines, he added. app

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