Even before the recognized stock exchanges came into operation the business of similar nature was done of the seaports of trading nations the first stock exchange came into operation inane of the Scandinavian countries followed by other countries of Europe later on London became the leader among the world stock exchanges because of the empire almost in all the corners of the globe. The wall street in new York, USA, now considered the biggest in the world was established in 1972, with the 24 members.
In the subcontinent, the east Indian company started this business. The leading stock exchange in India , the Bombay stock exchange, was established in 1850 solely managed and ran by the British’s. The local started this business under the banner of native stockbroker’s association. There were later merged into one.
The first stock exchange was formed in 1934. it had a brief career and merged with the Punjab stock exchange limited, which was incorporated in 1936. there were thus 8-stock exchanges in India 2-in Bombay, Calcutta and ahmedabad and 1 in each madras and Lahore.
In Lahore, which witnessed a great expansion in monetary income during the word war II, the Punjab share and the stock brokers association limited , the Lahore central exchange limited and all India stock exchange limited were setup, and these were in addition to the Punjab stock exchange limited which was established in 1936. The exchange in Lahore closed down, during the holocaust, which followed the partition of subcontinent and later one of them migrated to delhi, where it was merged with the Delhi stock exchange.
One of those stock exchange started constructing its own building in Lahore. It was almost complete when partition took place. The rehabilitation department of government decided to allot building to the association who would start a stock exchange in Lahore. Ian name lakhesar of naeem and co limited made a feeble attempt to start a stock exchange in late fifties under the title of stock exchange limited with few untraceable private limited companies as its members. The building was allotted to this exchange. It was later dissolved or died its natural death and the building was sold to oriental mutual insurance company. Thus Lahore is graveyard of 4 stock exchanges.
LSE At A Glance
The present Lahore stock exchange (guarantee) limited came into existence in October 1970, under the securities and exchange ordinance, 1969, of the government of Pakistan in response to the needs of provincial metropolis of the Punjab. Only 83 members had its membership and it was housed in a rented building in the crowded area of the bank square in the city of Lahore. The number of members has increased from 83 to 150 over a period of 25 years. Inadequacy of space, crowded area and sever limitation of communication cramped its style and stifled its growth. Only a few of all member were active, and they too had to work through Karachi stock exchange, or be limited to do business in bonus vouchers and bonds. It look the management two decades of uncertainties, apprehensions and planning to construct a suitable building for itself and venture out to its present locations at 19, Khayaban-e-Aiwan-e-Iqbal, Lahore. There was sufficient space, modern facilities, and all the needed communications at this new location . The move could not have been at a more opportune time. The Government of Pakistan had embraced the market economy policy. Deregulation was rapidly underway. Privatization of nationalized, and a part of public sector industries was speedily moving ahead on the international scene. Asia was identified as the future center of world growth. Lahore Stock Exchange was prepared to contribute its full share in this growth. Twenty one new members including six corporate members, were inducted in 1994 , bringing the number of members to 150. Some members have converted their individual memberships into corporate memberships. It was not long before the Lahore Stock Exchange come to its own Business has been steadily on the increase. A modern Management information System (MIS) has been firmly in place Clearing House activities are fully computerized. LSE is a sponsor of Pakistan Central Depository Company of Pakistan Limited (CDC).
LSE has setup a credit rating company named “Pakistan credit rating agency (pvt) limited, (PACRA) in the joint venture with the international finance corporation (IFC) and IBCA limited of London. This shall provide reference facilities for research projects. There is a calendar full of educative and instructive activities at LSE to keep its members upto date as well as afford opportunities to invest to enhance their knowledge for more effective investment.
There is a discernable tilt of investor towards LSE. DFI’s and market makers’s that had patronized KSE exclusively are showing signs of talking serious note of progress made by LSE. Rapid modernization of LSE, improvements implemented and planned in the management, development of interface capabilities have opened up new horizon for LSE. Better opportunities are appearing on the horizon.
So rapid has been the progress of LSE, and so phenomenal its growth is that all its previous plans have been rendered inaccurate. The management has been able to keep the situation just about under control through modernization, and significant improvement in communications.
The management of LSE is run by its managing director and policy board of directors and 17 committees. A permanent secretariat managed by managing directors and specialist professional legal, audit and account assistance is available to strengthen the implementation of management decision. LSE has taken shape of significant institution of Pakistan. It owes a debt of gratitude to its past presidents and members of the board who had contribute their time and energy to realize the dreams of LSE members. The securities and exchange commission of Pakistan (SECP), has had a large measure of contribution in guiding the direction of LSE. Their assistance has been readily available ensuring development of a systematic, orderly and sound institution. LSE today is an established institution with its own distinctive view which are taken seriously by the policy makers and legislators at national level.
The immediate modernization decision, intermediate expansion plans, and its perceived long term goals shall ensure that LSE firmly remains on the road to progress and prosperity, effectively expanding the upcountry capital market.