At the outset, I express compliments for the management of the esteemed daily Business Recorder (BR) for their active role and contribution for the development of the capital market in Pakistan. The special supplement being issued is also a part of such initiatives that BR management takes from time to time.
All around the globe, increasing attention has been directed at the role that capital markets play in stimulating or supporting economic development. During this time many countries have adopted policies aimed at creating domestic capital markets to realise some of these specific benefits. Domestic capital markets direct national savings to productive assets besides attracting foreign funds and investors. This process provides access to capital at lower cost and facilitates the growth of companies and the economy as a whole. The Capital markets reduce the dependence on bank financing, particularly during a credit crunch; provide a more liberal access to capital and financial support to innovators and entrepreneurs. Equity and debt markets, in particular, also serve to enhance corporate governance through increased monitoring of management performance, reduction of agency cost, and increase in the efficiency of investments and management decisions. On the demand side, as investors are provided with viable alternatives for investment, a saving incentive is created, which has other macroeconomic impacts relating to currency stability.
Unfortunately in Pakistan, the role of capital market has been much below the potential as a result both capital market and economy have remained at receiving end and focus of the domestic investments have remained on least productive channels. The capital market in Pakistan needs special attention and privilege from all stakeholders and certain incentives are quite imperative for the purpose. This is the high time, all stakeholders including government, the apex regulator and stock exchanges must devise a comprehensive long term plans for the development of capital market which would ultimately result in the sustainable growth of the economy, employment and revenue generation for our country. In the end, I on behalf of Islamabad Stock Exchange express strong commitment to leave no stone unturned to make integrated efforts for the development of the capital market of our country.