Degree

Master of Business Administration

Faculty / School

Faculty of Business Administration (FBA)

Project Type

MBA Research Project

Keywords

https://ir.iba.edu.pk/do/search/?q=Capital%20market&start=0&context=22553187&facet=">Capital market, Low investor base

Abstract / Summary

Economic development is directly linked to the well-being, progress and sustainability of the Capital Market. The research objectifies and aims to analyze the capital market of Pakistan in detail with major emphasis on its investor base. The research also aims to analyze the reasons behind low investor base and provides recommendations to increase the same. We adopted the Qualitative and Quantitative methodology to conduct the preliminary research. Qualitative research included both primary as well as secondary research. In secondary research substantial academic research papers, articles/reports on stock markets of developing and developed countries were comprehensively reviewed. The literature review and analysis formed the basis of primary quantitative research which laid the basic ground work for our Delphi Method. Open ended questions, feedback from expert panelists then lead to the development of common themes and common set of questions which were again reviewed by a group of panelists to form a common set of questions. Primary qualitative research included in-depth semi-structured interviews with capital market intermediaries as well as regulators. Quantitative research included questionnaires that were the outcome of the Delphi Method and system analysis for survey from relevant audiences. In order to accommodate true representation of the population, the audiences were divided into two broad categories, namely; investors, and potential investors. Semi-structured interviews were capital market intermediaries and regulators while questionnaires were developed for investors and potential investors. The questionnaires survey, interviews and adaptive system map was used to understand reasons for low investor base in Pakistan and possible recommendations that would lead to increased investor base. In total, 15 interviews were conducted and 80 questionnaires were filled by existing investors and potential investors. The analysis, concluded that in order to come as an emerging leader in the region, Pakistan needs to focus its efforts towards improving its capital market performance. It was learnt from the system map, interviews and questionnaires filled by existing and potential investors that the major reason behind the low investor base is due to Securities and Exchange Commission of Pakistan (SECP) and collaborative efforts by key capital market entities. The key recommendation was primarily, raising awareness ideally by running a campaign on electronic media depicting the benefits of investment in the capital market thus improving the perception of the capital market of Pakistan. Secondly, all key capital market players should collaborate for the formation of a task force with a single point agenda on increasing the investor base with half yearly and yearly targets instead of working in silos. Lastly, SECP should work out on regulatory policies and issues like market investments look attractive and be perceived as transparency to have the capital less risky. Also, SECP being the regulator should take the lead in initiating a media campaign to curtail the negative perception about the capital market. These steps shall in and attract masses which were never help convert potential investors and attract masses which were never before inclined to invest.

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