Author Topic: Govt Securities  (Read 2618 times)

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Offline jaz

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Govt Securities
« Reply #-1 on: February 01, 2014, 01:14:21 PM »

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Govt Securities
« Reply #-1 on: February 01, 2014, 01:14:21 PM »

Offline jaz

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Re: Govt Securities
« on: February 01, 2014, 01:59:47 PM »
I wish our govt is, a fraction as efficient as mods of this forum  :tongue:

Offline SBM

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Re: Govt Securities
« Reply #1 on: February 01, 2014, 02:18:50 PM »
chalo ismein paisay banao ...
brokers should offer high leverage on this.  :biggthumpup:
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Offline Valueestimator

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Re: Govt Securities
« Reply #2 on: February 01, 2014, 05:39:54 PM »
chalo ismein paisay banao ...
brokers should offer high leverage on this.  :biggthumpup:

the main loosers will be brokers who used to get benefit of float.
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Offline blue bird

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Re: Govt Securities
« Reply #3 on: February 02, 2014, 01:14:41 AM »
Can anybody tell whether these securities are sharia complaint?

Offline jaz

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Re: Govt Securities
« Reply #4 on: February 02, 2014, 10:11:50 AM »
Can anybody tell whether these securities are sharia complaint?
I believe sukooks will also be traded on the exchange. Moreover, short term papers will provide good opportunity to park the liquidity. Clarity will emerge as the brokerage houses offer the product

Offline Dehan

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Re: Govt Securities
« Reply #5 on: February 02, 2014, 11:51:42 AM »
Can anybody tell whether these securities are sharia complaint?

Bhai Govt ka maal halal hi hota hay.
"Suno sab ki, laiken Dehan apna apna"

Offline sherazzulfiqar

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Re: Govt Securities
« Reply #6 on: February 02, 2014, 04:56:43 PM »
Can anybody tell whether these securities are sharia complaint?

Bhai Govt ka maal halal hi hota hay.

Sorry Dehan bhai, i have lot of respect for you but Goverment income include Income tax, Sales tax and Custom Duty. According to hadith "One who impose tax on food will not muslim or mushriq" Sales tax is imposed on food items. Futher, goverment borrowed loan from local banks and pay interest further receive grants from IMF, who funds to goverment out of their interest income. So their is no concept of halal in any way. Please correct me but this is what i think goverment income belong to :$:
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Offline Zain

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Re: Govt Securities
« Reply #7 on: February 03, 2014, 03:48:51 PM »


 

KARACHI: The Karachi Stock Exchange (KSE) has soft-launched the trading of government debt securities on its bond automated trading system (BATS) on Friday.

 

The Government Debt Securities Market (GDS Market) of the KSE will allow secondary market trading of government securities in the stock exchange. The soft launch will test the IT platform and post execution settlement processes so that the formal official launch by the finance minister in a few weeks’ times remains smooth and without hitches.

 

The trade executed and settled on Friday had five participants, including Bank Alfalah, JS Global, KASB Securities, Arif Habib Securities and AKD Securities. Trading was tested for 30 minutes, under which a trading of Rs3.5 million was witnessed.

 

Nadeem Naqvi, managing director of KSE, speaking on the occasion, said that this was a major milestone in the development of capital market in Pakistan. He said that the average saver and investors could now invest directly in government securities, such as Treasury Bills, Pakistan Investment Bonds and Islamic Sukuk Ijara Securities through their broker. This would encourage greater savings in the country as the return on government securities was typically higher than bank deposits of similar maturities, while the secondary market would provide liquidity, enabling easy entry and exit for investors.

 

In terms of investment risk, he highlighted that if government securities were held till maturity they provided guaranteed return with no risk of capital loss. Thus, investors would create investment portfolios having a combination of government securities and shares whereby downside risk could be reduced by the former, while enabling the capture of upside return from the latter.

 

The MD KSE explained that all efforts had been made to make the investment process relatively easy for retail investors. If an investor wants to invest in government securities, all he/she has to do is first open a brokerage account (with a stock broker) and an IPS account with CDC. Once the accounts are operational, the investor would need to deposit funds in CDC’s designated bank account one day before trade (purchase) and instruct the designated broker to purchase the type and rupee amount of T-bills, PIB’s or Sukuks. The designated broker, on the trade date, would execute the transaction after confirmation that funds are available at CDC. After execution of the trade, CDC would transfer the respective government securities to investors’ IPS account held at the CDC.

 

The broker, in the meanwhile, would also provide the investor with confirmation of the transaction. At no stage in the transaction, would the investors’ money or securities be in custody of the broker and these would be directly settled at the CDC. This method removes the intermediation risk for the investor.

 

Nadeem Naqvi said that the State Bank of Pakistan had now allowed primary dealer banks to participate in KSE’s GDS market and act as market makers if they so wish. This will enable these banks to make two-way quotes (bid and offer) to buy and sell government securities so that investors could both enter and exit the GDS market easily. In fact, the presence of market makers is essential to create liquidity in this market. Besides, the banks, which have SBP permission to participate in GDS market, brokers and other financial institutions could also act as market makers if they fulfill the exchanges’ criteria and requirement on applying for permission to become market maker.

 

The MD KSE emphasised the burden of making GDS market a success and useful for investors now falls on the stock brokerage industry. Brokers have the largest distribution network with people and institutions that invest in the capital market.

 

It is now up to the brokers to leverage their network of relationships and provide their investing clients a choice of a new, safe and liquid asset class to invest their savings. As far as the role of the exchanges is concerned, Naqvi stated that a comprehensive investor awareness generation programme was already underway by Karachi, Lahore and Islamabad stock exchanges. Now, the exchanges would weave the government security investing aspect into this programme and expand the reach and frequency of the programme so that the largest number of savers is made aware of this new facility for investment.

 

Offline High Tech Investor

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Re: Govt Securities
« Reply #8 on: February 03, 2014, 11:15:45 PM »
Does any one guide to invest in goverment securities or not ???

If yes then what are strong fundamentals ???

Offline MZ

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Re: Govt Securities
« Reply #9 on: February 04, 2014, 09:01:38 PM »
Another emporium for the retail segment

The wait is finally over! Government securities have started trading on the local bourse. In the run-up to the launch of soft trading on KSE last Friday, the government was seen harping on the benefits of this activity.

For the uninitiated, the treasurys primary motive of government is to expand the investor-base for its securities to the retail segment. Currently, the bulk share of government securities, about 77 percent, is gobbled up by the scheduled banks.

This development has raised certain questions. Is it time for the mutual fund industry to nervously start grinding its teeth? Will the asset management companies start fretting over limited availability of government securities for their existing asset-base of mere Rs363 billion, which is already quite low compared to over Rs7 trillion in deposits held by the banks?

Whether this may be the case 10-20 years down the road, mutual fund industry will likely remain the preferred choice of existing mutual fund investors, at least in the short term. Apart from active professional management and access to diversified portfolio allocations, what really charms investors towards mutual funds the most is the ax advantage attached to them.

Moreover, in the short run, the idea of retail investors investing in government securities is still vague in the minds of market participants who claim that these investors hardly make up 1 to 2 percent of the total investment in government securities. Thats because there is a need to understand that investing in T-Bills, PIBs and Sukuk bonds is not a ball game for raw investors, as such complicated investment avenues require a thorough understanding of their nitty-grittys.

Keeping in view the complexities of government securities and national savings schemes, it seems that the retail segment rather prefers routing their savings to bank deposits even at relatively lower rates to avoid the hassle. That is why, investment in bank deposits makes up 96 percent of the total investment in NSS, mutual funds and bank deposits (see pie chart).

A majority of the fund managers BR Research spoke to tend to view this initiative as neutral, while others felt that this initiative will ensure price transparency. However, the cost of trading on BATS terminal must not exceed the cost of trading via OTC transactions, otherwise market participants may start brushing off the idea of investing through stock exchanges.

Regardless of its potential impact, the government initiative is a good omen for promoting the savings culture in the country. The savings market in Pakistan is still untapped and there is a real need to expand the investor- base.

Offline jaz

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Re: Govt Securities
« Reply #10 on: February 04, 2014, 09:15:13 PM »
Another emporium for the retail segment

The wait is finally over! Government securities have started trading on the local bourse. In the run-up to the launch of soft trading on KSE last Friday, the government was seen harping on the benefits of this activity.

For the uninitiated, the treasurys primary motive of government is to expand the investor-base for its securities to the retail segment. Currently, the bulk share of government securities, about 77 percent, is gobbled up by the scheduled banks.

This development has raised certain questions. Is it time for the mutual fund industry to nervously start grinding its teeth? Will the asset management companies start fretting over limited availability of government securities for their existing asset-base of mere Rs363 billion, which is already quite low compared to over Rs7 trillion in deposits held by the banks?

Whether this may be the case 10-20 years down the road, mutual fund industry will likely remain the preferred choice of existing mutual fund investors, at least in the short term. Apart from active professional management and access to diversified portfolio allocations, what really charms investors towards mutual funds the most is the ax advantage attached to them.

Moreover, in the short run, the idea of retail investors investing in government securities is still vague in the minds of market participants who claim that these investors hardly make up 1 to 2 percent of the total investment in government securities. Thats because there is a need to understand that investing in T-Bills, PIBs and Sukuk bonds is not a ball game for raw investors, as such complicated investment avenues require a thorough understanding of their nitty-grittys.

Keeping in view the complexities of government securities and national savings schemes, it seems that the retail segment rather prefers routing their savings to bank deposits even at relatively lower rates to avoid the hassle. That is why, investment in bank deposits makes up 96 percent of the total investment in NSS, mutual funds and bank deposits (see pie chart).

A majority of the fund managers BR Research spoke to tend to view this initiative as neutral, while others felt that this initiative will ensure price transparency. However, the cost of trading on BATS terminal must not exceed the cost of trading via OTC transactions, otherwise market participants may start brushing off the idea of investing through stock exchanges.

Regardless of its potential impact, the government initiative is a good omen for promoting the savings culture in the country. The savings market in Pakistan is still untapped and there is a real need to expand the investor- base.
What nitty gritty needs to be understood for investing in 3 month t bills  :o
« Last Edit: February 04, 2014, 09:18:30 PM by jaz »

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