Summary of the webinar

Will Financial Markets in Pakistan Ever be Developed?

Date and time: April 28, 2020; 1100A.M
Moderator
Dr. Nadeem Ul Haque (Vice-Chancellor, PIDE)
Chief Guests
Mr. Khalid Mirza (Former Chairman SECP and CCP)
Mr. Aftab Ahmed Choudhry (Former Managing Director/Chief Executive Officer, Lahore
Stock Exchange)

A webinar on “Will Financial Markets in Pakistan Ever be Developed?” was arranged by

Pakistan Institute of Developmental Economics (PIDE) on April 28, 2020. The purpose of the
webinar was to educate the participants that how Pakistan’s financial system work, its
challenges, root causes of its inefficiency and the way forward.

Opening of the Webinar by Vice-Chancellor, (PIDE)

Dr. Nadeem Ul Haque, Vice-Chancellor, (PIDE), opened the webinar and welcomed all the
Guests and participants. He shed light on the key points of the previous webinar on financial
markets and linked it to the one in the hand. He then invited the first chief guest, Mr. Khalid
Mirza, for his key note speech.

Mr. Khalid Mirza introduced financial system and divided it into two parts: risk-averse (i.e.
banking) and risk-taking (stock or capital markets). About the first, i.e. risk-averse, he told that
banking system in Pakistan is working properly and there has no major flaw except the over
regulations. On the other part, i.e. risk-taking section, he was of the view that this part of the
market is inefficient and poor performer. He highlighted the following major challenges faced
by this sector in the country:

• Mortgage problem
• Stock Market Monopoly
• Small number of Stock Brokers
• Inefficient investment and mutual funds institutions
 • Government intervention in the recruitment and internal policies
• Intervention/pressure of donor agencies in the regulators’ affairs
• Poor legislation and audit

Finally, he suggested that for the better performance of the market these problems should
be addressed and the market should be allowed to work independently. He emphasized on
encouraging competition in the market by providing alternatives platforms to the investors
and funds seekers.

The moderator then invited the second guest, Mr. Aftab Ahmed Choudhry, to share his opinions
with the participants.

Mr. Aftab Ahmed Choudhry agreed with the issues, problems and remedies discussed by Mr.
Khalid Mirza. However, he said that the main problem faced by Pakistan’s financial market is
its structure and lack of transparency. According to him, from the last two decades there is no
increase in the number of listed companies in the Pakistan stock market due to the lack of
transparency. Further, he pointed out that asymmetric information is another major hurdle in
the development of financial market, which need to be corrected. likewise, he suggested the
legislation should be improved, economy to be documented, public awareness programs to be
initiated and transparency and professionalism should be ensured.

After that the moderator opened the session for participant with the permission of the chair.
Mr. Haroon Sharif, a participant, blamed the stakeholders for statuesque and Global Institutions
like ADB. He also suggested that the government should start issuance of the bonds at the local
and provincial government level to finance their projects.

Another participant, Mr. Asad Ali Shah, pointed out flaws in the government policies related
to entrepreneurship. Mr. Nisar A, Memon in his talk highlighted the ignorance of public and
their agents from the financial markets and suggested that these issued be discussed at the floor
of the parliament. Mr. Naseem Akhtar argued that through modernization and automation these
problems can be easily resolved. Finally, Mr. Shamim Ahmad Khan shed light on the historical
development of Pakistan stock exchange.

At the end of the session vice chancellor thanked all the guests and participants of the session
and showed interest that in the coming days similar webinars will be arranged on contemporary
economic issues.