Finance Ministry Backs Big Market Revamp By Adding More PSX Stocks to MSCI Index

Khurram Schehzad, Advisor to Finance Minister, was invited to the Pakistan Stock Exchange (PSX) by CEO, PSX, Farrukh Sabzwari, to discuss strategies for enhancing the depth and performance of the capital market. During his meeting with the CEO and senior management of PSX, Schehzad received a comprehensive overview of PSX’s strategic initiatives aimed at unlocking potential of Pakistan’s capital markets. Schehzad emphasized the need for the PSX and the SECP to collaboratively develop a roadmap aimed at increasing Pakistan’s weight within the MSCI Frontier Markets index, ultimately achieving inclusion in the MSCI Emerging Markets index. He also endorsed the recommendation to form a formal committee comprising PSX, SECP, and the State Bank of Pakistan (SBP) to leverage each entity’s strengths. This initiative would aim to foster financial inclusion, enhance public awareness, and promote seamless digitization. Promoting the KSE-100 Index’s remarkable returns was identified as an essential task for brokers and market participants. The CEO of PSX emphasized that, despite challenges, Pakistan’s capital markets possess immense potential. He expressed confidence that through a well-formulated strategy, PSX could realize this potential and significantly contribute to the economy. Schehzad reaffirmed the government’s commitment to supporting capital market growth, recognizing its role in stabilizing as well as underpinning growth in the country’s economy. To achieve this goal, Schehzad urged the management to formalize recommendations for structural changes and privatization of State-Owned Enterprises (SOEs), which could advance governmental goals and boost market capitalization. Furthermore, he recommended rebranding and repositioning the GEM board to function as a platform for venture capital and startup fundraising. The Key Initiatives planned and discussed include: Schehzad praised the relaunch of cash-settled futures as a significant step towards developing the country’s derivatives market. Collaboration with Chinese capital markets is critical to facilitate cross-border investment opportunities, broaden market access, and stimulate investor participation. With these initiatives, Pakistan’s capital market is poised for significant growth, driving economic development and stability.