This article serves the purpose of highlighting the impact of religious laws in Pakistan. This article diverts the reader’s attention towards the implementation and interpretation of these laws without going into the finer and complex nuances of either law or religion. The text of the article suggests that the promulgation of legislation enacted as Islamic in Pakistan has been used by the state to control and discipline the imagination of its citizens and to limit the political choice of populace.  Unfortunately the politics on the name of Islam is also a common practice to crush political opposition and gain legitimacy, especially for autocratic regimes. The alarming issue here is that these laws served nothing good but these laws affect ordinary citizens on daily basis. Social fabric and plurality of Pakistani society is badly ruptured. Contrary to the claims only negative changes are observed after the consecutive attempts to make Pakistan an Islamic state.

The article highlights the problem of identity crisis and the confusion and disillusionment regarding the legal and political doctrine in Pakistan. The confusion in the minds of masses on the ideology of Pakistan as an Islamic or secular state is still not solved. One of the main reasons of this confusion is also the politics through which a separate state Pakistan was achieved by Jinnah and Muslim League but before the boundary commission the politics of Jinnah revolved around Islam and his 11^th august speech which clearly states Pakistan as a secular state.

After creation of a new state in Muslims dominant western regions as Pakistan, Muslim league was not in position to dodge people on the question of religion. Islam was the driving force throughout the whole process of partition. The Lahore Resolution in 1940 and the elections of 1945-46 were the two prominent and notable incidents which depict the political situation at that time. These two events show a very good picture of how Islam was used to mobilize Muslims of Indian subcontinent for the cause of a separate state. This tactic for mobilization worked very effectively and Muslim league gathered a huge support of Muslims throughout India.

Soon after partition a demand for incorporation of Islamic laws in constitution and for bringing different sets of laws in conformity with Islam continued. The dominant feature in all the three constitutions of Pakistan was injunction of Islamic principles. It was assured in all these constitution that anything contrary to Islam’s basic principles would be invalid even though the state commitment in this regard varied greatly. The state used Islam as a special tool for political negotiations, legitimizing itself, and gaining political and moral support of masses for itself on various occasions.

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This article is an in-depth look at the state of the equity derivative market in Pakistan. It examines the current market state, compares its performance with those of India, and offers explanations for the problems faced by the market. In the end, the writer offers several recommendations on how the various regulatory bodies and institutions can seek to improve the state of the derivative market.

We start of by defining exactly what a derivative is. A derivative is a financial instrument whose value and cash flows depend on the value and cash flows of an underlying asset. Examples of such instruments are forward and future contracts, options, swaps etc. However, in this presentation we only consider the equity derivative market of Pakistan.

The derivatives market in Pakistan was started in 2001, with the introduction of single stock deliverable futures. Since then, various other instruments have been introduced, such as cash settled futures, index futures (based on KSE 30 index) and 7 day cash settled futures.

However, despite these developments the performance of the Pakistan equity derivatives market remains poor, as compared to India (which started its derivatives market in 2000), and other developing countries. The trading volume is 3-4% of the spot market volume, which is very low. Also, most of the investors in this market are individual and small investors. Institutional participation is very subdued, and only limited number of banks, NFBCs, and companies take part in this market. Further, the single stock deliverable future remains the most popular instrument traded, with almost 100% volume attributed to this. Other instruments like cash settled futures and index futures are traded minimally, despite their myriad advantages.

The author bases her reasons on a survey she conducted on reasons for the low participation of institutions in the market. According to her, the major reason for low institutional involvement is the lack of knowledge and technical expertise, along with internal policies prohibiting investment in derivatives. Further, the lack of liquidity is another factor, and the fact that due to technological improvements, the margin calls of derivative investments now come directly to institutions.

The author finally gives some recommendations, which include increasing investor knowledge and human capital development to increase expertise, as well as developing clear and string risk management policies for institutions. Finally, she recommends that public sector get more involved in these markets to improve liquidity.

The article “Can China’s Currency Go Global” by John H. Makin considers whether the yuan could replace the dollar as an international reserve. The author delves into the current economic market of the Yuan and its financial viability, while also reflecting on its future. He looks at both sides of the coin, and after due deliberation reaches his conclusion.

The fact which most supports the globalization of the Yuan is China’s rapid emergence as a global economic superpower. As the second largest economy in the world, China accounted for about 90 percent of global growth in 2009. However, the author contends that it cannot be assumed that China’s economic achievements will translate completely into its financial markets. China has not yet achieved financial superiority and the Chinese securities market as yet poses no threat to the US, even though large companies such as Caterpillar and McDonald’s have issued Yuan-denominated bonds. 

Another issue that the author looks at is the growing use of Chinese currency for trade. According to Makin, China is heading towards internationalization of the Yuan and has thereby expanded the scheme that allowed imports and exports to be invoiced in the Yuan, with trade settled in Yuan between June and November 2010 equaling 340 billion Yuan. However, the widespread use of Yuan as a medium of exchange and unit of account (since goods are being invoiced in Yuan) does not necessitate its adoption as a reserve currency. The reason cited for this by the author are the restrictions imposed by the Chinese government.

The adoption of the Yuan as an international reserve must be preceded by a guarantee of full convertibility by the Chinese government. It would have to allow capital outflows and respect property rights. Essentially, lack of full convertibility means that to invest in capital (i.e. buy an equity stake, purchase an asset or take part in any merger/acquisition) in China you need to have an investment holding company in China which requires minimum capital of US$30 million.

Thus, Makin argues that for the Yuan to emerge as a global reserve currency not only is full convertibility imperative, rather it must also forego all further controls on global capital flows and avoid relentless currency intervention.

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