A consortium of Chinese companies have purchased 40 percent of Pakistan's only stock exchange in Karachi.
This is the price Pakistan is paying in return for Chinese investments in CPEC.
CPEC is expected to cost USD 46 billion.
Karachi based Pakistan stock exchange agreed to sell the stakes for USD 85 million.The consortium comprises three China bourses:
- Shanghai based China Financial Futures Exchange
- Shanghai Stock Exchange
- Shenzhen Stock Exchange
The above 3 have taken 30 percent of the shares.
Another two companies, Pak-China Investment Company Limited and Habib Bank Limited have picked 5 percent each.
This is the first time Chinese companies have acquired a share of a foreign stock exchange.
Another Chinese consortium has been trying to acquire the Chicago stock exchange, but is facing resistance from US senators.
China is now trying to connect Shanghai stock exchange with London.
It has recently connected this stock exchange with Hong Kong and Shenzhen.
China Securities Regulatory Commission supports this acquisition.
Shanghai stock exchange said this would improve Pak-China ties and implement the Belt and Road Initiative and CPEC both.
PSX expected the investment will bring experience, technological assistance and new products.
Market will also be internationalised.PSX: Know More
- Formed: Jan 2016
- Formed by merger of Lahore, Karachi and Islamabad stock exchanges.
- Included in emerging market index of Morgan Stanley Capital International in June 2016.
- Market reforms have accelerated with Chinese investments.
- This is making PSX appealing to global investors