Finance Minister urges capital market reforms to boost investor base, debt market

ISLAMABAD: Finance minister Dr. Shamshad Akhtar on Friday urged regulators and market players to work together to boost the number of investors and listings on the country’s stock exchange, saying the securities market can play a vital role in developing the debt market.

Dr Akhtar, speaking at the launch of a digital platform that allows investors to open accounts across different asset classes with standardized KYC requirements, said the government could issue debt securities through public auctions at the Pakistan Stock Exchange (PSX) to facilitate retail participation and transparency.

“Attracting new investors in the capital market should be one of our primary objectives going forward, which requires coordinated efforts from all Capital Market Infrastructure Institutions (CMIIs), as well as the market intermediaries, especially the brokerage houses, under the guidance of SECP,” she said, referring to the Securities and Exchange Commission of Pakistan.

She also called for reducing the costs of investing in the capital market, especially for small investors, and for encouraging more Initial Public Offerings (IPOs) on PSX, which she said would enhance liquidity and enable higher trade volumes.

“A greater supply of securities in the market shall enhance liquidity, enabling the generation of higher trade volumes.” Akhtar praised the efforts of SECP, PSX and other stakeholders for developing the Centralized Gateway Portal (CGP), which she said has the potential of transforming the landscape of Pakistan’s capital markets.

However, she added that the successful launch of the CGP should not be deemed the end of this project and that it requires focused marketing efforts and promotion by PSX and other stakeholders like brokers, insurance companies and asset management companies.

The minister asked SECP and PSX to work aggressively for creating awareness, making the listing process efficient and facilitating businesses in utilizing the stock exchange for capital formation.

She suggested that PSX should maintain an IPO pipeline and set targets in consultation with the CMIIs. The minister also asked SECP and capital market institutions to collectively review the costs of investing in the capital market, particularly to ensure that maintaining an account is not expensive enough to discourage small investors.