A number of brokers in the Pakistan Stock Exchange are opposing the nomination of a Canadian citizen as its managing director, following a 40 per cent takeover by a Chinese consortium, a report said today.
A number of brokers in the Pakistan Stock Exchange are opposing the nomination of a Canadian citizen as its managing director, following a 40 per cent takeover by a Chinese consortium, a report said today. The Pakistan Stock Exchange (PSX) was sold to a Chinese consortium that now holds a 40 per cent but the arrangement relationship seems to have hit its first real stumbling block with some brokers and members of the PSX opposing China’s nomination of Richard Morin as managing director. While the PSX is yet to formally announce Morin’s appointment as the latest MD, officials confirmed that the board of directors has finalised it in principle, the Express Tribune reported.
However, a couple of brokers, showing their concern over the unofficial appointment, said the Canadian national would unnecessarily cost more to the company – the PSX – as he is being appointed at a huge salary and is also being given special perks, including residential allowance and international travelling expenditure. In addition, a broker said the foreign national would not be aware of “our national culture and particularly, the stock market culture” and this may prove to be a hindrance in his performance. “The stock market mostly operates on personal rapport and relationship and he (Morin) lacks that on both fronts,” a broker said.
A PSX official, confirming the appointment, however, said they have not received any formal opposition from the brokers and members have the right to have their personal opinions. “Only the shareholders of the company (PSX) have the right to accept and reject his appointment and approve and disapprove of his monthly package. They may do this at the forthcoming Annual General Meeting likely to be held at the end of this month or at the beginning of next month,” he said. He said Morin is a professional and experienced official who has served at Canadian stock markets and the Stock Exchange of Mauritius. He has worked at several brokerage houses and asset management companies.
The official added that PSX has given the right to its Chinese shareholders to nominate candidates for the top three positions of the market — managing director, chief financial officer, and chief regulator officer. However, the full board of directors is still has the power to finalise appointment of candidates. “We have given them (Chinese) the right to nominate candidates after the PSX sold its 40 per cent stake to the Chinese consortium early this year,” he said. The official said it may take one to two weeks to make the formal announcement of the appointment.
The new managing director’s appointment is being made at a time when the PSX’s benchmark KSE-100 index is struggling to recover from a steep correction. Despite a slim recovery to 42,841 points till September 18, the index is still close to 23 per cent lower from its peak of 52,876.46 on May 24. Last year, it grew 46 per cent and emerged as Asia’s top-performing stock market and among the top five in the world.