Covid-19 has hit financial markets hard. The question is will the loss be irreversible?
There is no second opinion on the fact that market stakeholders are struck with the devastating impact of this pandemic. The question remains how long will it take for the markets to recover or will there ever be a recovery? In the near middle of the last century, we saw that the great depression had a crushing impact on economies around the world. At the start of this century, a great recession revealed the loopholes in trading and stock markets. This brings us to the ongoing pandemic and its resultant effects. To come out of this pandemic with heads held high, government institutions need to establish close coordination for effective results. The good thing is that the security and exchange commission of Pakistan (SECP) is doing so.
SECP has been rather mobile in approaching the shareholders and stakeholders. The main motive behind this activity is an assessment of the emerging situation in the wake of this crisis. Much is yet to be discovered because the economic rubble generated as a result of this pandemic goes deep. Meetings were held between chairman SECP and board of directors of the central depository company of Pakistan. Several issues and developments came under discussion. CDC shared important updates with SECP especially those that are taken to counter the effects of this pandemic. Recent important developments in line with current reforms in the CDC and the status of multiple projects were also discussed.
Steps were taken by CDC to ensure continuity of operations in a smooth manner also came under light. CDC effectively did so by shifting its workforce on a “work from home” management system. This helped create an environment independent of outside conditions. Chairman SECP praised the steps taken by the CDC to ensure the progress of capital markets. While remaining on the subject, the chairman also extended full support to CDC. The head of matters at SECP also vowed to respond appropriately to the resultant impact of this crisis, thereby creating an opportunity from chaos for capital markets.
Meeting of the capital market advisory committee also took place in which representatives and respondents from different sectors took part. The committee keenly observed the recent reforms and lauded SECP’s timely efforts to balance the financial impact on stock markets due to this pandemic. These efforts helped improved confidence, ensured business operations, and enhanced business continuity despite a continuously deteriorating situation in the country. It was also noted that broadening the scale of circuit breakers by SECP helped to retain and recover price discovery and curbed the imminent detrimental effect – An act that was also appreciated by foreign investors.