Qudsia Bano

Clients should do needed research and consult with experts before engaging in online trading, and it is extremely necessary that investors fully understand the risks associated with such trading. This was stated by Muhammad Shahzad, head of finance, Merchant Investments Limited, a brokerage firm, during a conversation with WealthPK, during which he also provided an honest assessment of the state of Pakistani economy.

WealthPK: What are the risks involved in electronic/online trading?

Muhammad Shahzad: Electronic/online trading carries a number of risks. It may occasionally be negatively impacted (among other things) by network congestion, equipment failure, software failure, system breakdown, loss of connectivity, power failure, unfavourable market conditions, partial order execution, and/or technical glitches/failures (including but not limited to connectivity failures).

The client has to understand and agree that neither the broker nor any of its directors, officers, management, branch offices, offices of supervisory jurisdiction, and respective registered representatives and employees will be held accountable or liable in any way for any losses or damages, including those resulting from unauthorised use of the account holder’s information and affairs. Any and all risks related to and associated with electronic/online trading should be solely assumed by the client(s).

The client(s) must certify that they are knowledgeable investors, that they have done the research and consulted with experts they deemed necessary to fully understand the risks associated with online trading, and that they are in a position to engage in such trading activity.

WealthPK: What are the major causes of economic instability in the country, and how can they be tackled?

Muhammad Shahzad: Achieving long-term and inclusive economic growth is a far cry when governments tend to undertake short-term and politically-motivated decisions in a bid to achieve quick results and cement their hold on power. Premature downfall of governments also results in change in economic priorities. An uncertain situation takes hold in the event of an abrupt change in government.

Large investment groups avoid investing their capital in a country where there are ambiguous policies that appear to be short-term and lack a long-term perspective. Political stability and economic growth are directly related and investments will flow into the countries that are politically stable. Political instability has hampered efficient planning and resource management.

WealthPK: Political noise has an adverse effect on the country’s economy. Do you agree with that?

Muhammad Shahzad: The continuing political instability is definitely feeding into economic vulnerability, scaring businesses away and shifting the authorities’ focus away from the burning issue of fixing the structural flaws in economic structure. Pakistan is also vulnerable because of a large informal sector, precarious rural livelihoods, reliance on a small number of industries for production and exports and globalisation of supply chains.

WealthPK: What is the market sentiment amid economic slowdown?

Muhammad Shahzad: The Consumer Confidence Index in Pakistan has plunged to the lowest levels after the country was severely devastated by the floods brought on by unprecedented monsoon rains. A downturn in economic growth, rising inflation and growing trade and current account deficits have also contributed to the sagging sentiment.

About the company

Having existed for 60 years, Merchant Investments is one of the oldest brokerage businesses on the Pakistan Stock Exchange. The brokerage firm is renowned for providing its clients with quality professional services. Besides its offices in Karachi, Lahore, and Rawalpindi, Merchant Investments is the first brokerage house to open offices in Dhaka, Khulna and Chittagong cities of Bangladesh.

Credit : Independent News Pakistan-WealthPk