Client Name

Pakistan Stock Exchange (PSX)

Faculty Advisor

Dr. Mujeeb U Rehman Bhayo

SBS Thought Leadership Areas

Investment Decision Making

SBS Thought Leadership Area Justification

The performance and structure of capital markets are directly linked to how investors assess risk, allocate capital, and make portfolio decisions. By identifying inefficiencies in Pakistan’s market infrastructure and proposing evidence-based improvements, our work offers valuable insights into how emerging markets can shape investor behavior through better regulation and technology. The outcomes of this project have implications not only for regulators and market participants, but also for researchers and policymakers engaged in financial sector development.

Aligned SDGs

GOAL 16: Peace, Justice and Strong Institutions

Aligned SDGs Justification

The project highlights the critical importance of transparency, accountability, and institutional integrity in strengthening Pakistan’s capital markets. Through an in-depth analysis of regulatory frameworks, investor protection mechanisms, and the need for technological advancement, it underscores the urgency of developing stronger and more inclusive financial institutions. Such reforms are essential for building investor trust, enhancing fair market participation, and furthering a more just, transparent, and resilient economic system.

NDA

No

Abstract

This report provides a three-phase assessment of Pakistan’s capital markets, identifying key structural challenges, drawing global comparisons, and recommending reforms for the Pakistan Stock Exchange (PSX). Phase 1 outlines the market’s limited depth, low investor participation, and regulatory inefficiencies, which hinder its role in economic growth. Phase 2 reviews capital market reforms in developed, emerging, and frontier economies, highlighting successful strategies in improving transparency, liquidity, and investor engagement. These global insights underscore the need for technological advancement, stronger disclosures, and inclusive investor frameworks in Pakistan. Phase 3 presents five strategic proposals for the PSX, including timely disclosure of material information, improved free float regulations, the launch of an AI-driven investor support chatbot, the introduction of derivatives (conventional and Shariah-compliant), and enhanced market surveillance. Collectively, these reforms aim to improve market integrity, boost investor confidence, and support the long-term growth and competitiveness of Pakistan’s capital markets.

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

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