PSX and Finance Advisor Discuss Strategies to Boost Capital Markets

The meeting, hosted by PSX CEO, provided

an overview of strategic initiatives

designed to unlock the market’s potential

Business Reporter

Karachi: Advisor to the Finance Minister, Mr. Khurram Schehzad, visited the Pakistan Stock Exchange (PSX) to explore strategies for enhancing the depth and performance of Pakistan’s capital markets. The meeting, hosted by PSX CEO Mr. Farrukh Sabzwari, provided an overview of strategic initiatives designed to unlock the market’s potential.

Unlocking Market Potential Amid Challenges

During the meeting, Mr. Sabzwari highlighted the immense potential of Pakistan’s capital markets despite ongoing challenges. He stressed the importance of a robust strategy to harness this potential, contributing significantly to the national economy.

Mr. Schehzad reaffirmed the government’s commitment to fostering market growth, recognizing the critical role of the capital market in economic stability and expansion.

Key Initiatives Discussed

The following strategic initiatives were outlined to enhance market performance and investor engagement:

• High-Value Public Listings: Efforts to attract foreign investment through high-value listings and increased market capitalization.
• Expanding the Investor Base: Aiming to grow the investor base to 2% of the population within three years, with active involvement from brokers and mutual funds.
• Introduction of New Products: Launching innovative products like Exchange-Traded Funds (ETFs), options markets, and derivatives to diversify investment opportunities.
• Modern Trading Strategies: Incorporating algorithmic trading and robo-advisory services inspired by successful global practices.

Focus on Structural Reforms

Mr. Schehzad emphasized the importance of formalizing recommendations for structural changes, including the privatization of State-Owned Enterprises (SOEs). He also proposed rebranding the GEM Board to serve as a fundraising platform for startups and venture capital.

Strengthening Market Presence

A roadmap for increasing Pakistan’s weight in the MSCI Frontier Markets index and eventual inclusion in the MSCI Emerging Markets index was also discussed. Mr. Schehzad endorsed forming a collaborative committee with PSX, SECP, and the State Bank of Pakistan (SBP) to leverage their combined expertise.

Promoting Financial Inclusion and Growth

The initiatives aim to enhance public awareness, foster financial inclusion, and digitize market operations. Collaboration with Chinese capital markets was identified as critical for broadening cross-border investment opportunities and stimulating investor participation.

Mr. Schehzad commended the relaunch of cash-settled futures as a pivotal step in developing the country’s derivatives market. He also urged brokers to promote the remarkable performance of the KSE-100 Index to attract more investors.

Driving Economic Development

With these strategies, Pakistan’s capital markets are positioned for significant growth, paving the way for economic development and stability.