Page 88 - CMA Journal (Mar-Apr 2026)

O T HE R F E AT URE S

Pakistan’s capital markets are entering a new phase with the assets. In economic terms, this is a decentralized investment
launch of the Capital Market Development Fund on May 6, cycle that has not yet been captured within capital market
2026. Established under the Securities and Exchange intermediation. grid expansion, and digital infrastructure. Projects such as Structural Shift
Reko Diq, one of the world’s largest undeveloped copper
Commission of Pakistan (SECP), the fund is supported by and gold deposits, are central to Pakistan’s long term Pakistan’s economic direction is gradually shifting toward
key capital market institutions including the Pakistan Stock The macroeconomic impact is already signi cant. Solar domestic resource mobilization and reduced dependence
Exchange Limited (PSX), Central Depository Company of adoption has generated estimated savings of over 12 billion resource outlook and are moving toward phased on external debt. In this context, capital markets must
production.
Pakistan Limited (CDC), National Clearing Company of dollars in oil and LNG imports between 2021 and early 2026, evolve from transactional platforms into core nancing
Pakistan Limited (NCCPL), Pakistan Mercantile Exchange with further savings of around 6.3 billion dollars expected Feasibility assessments indicate multi-billion-dollar annual systems for real sector development. By integrating
Limited (PMEX), and the Institute of Financial Markets of by the end of 2026. Global solar module prices have export potential once operational. To unlock this value, renewable energy and mineral assets into structured
Pakistan (IFMP). It introduces a coordinated institutional declined by nearly 40 percent over the past two years, Pakistan must develop commodity linked securities, mining nancial instruments, Pakistan can mobilize domestic
mechanism for capital market development, starting with further strengthening project economics and accelerating investment trusts, and exchange traded mineral savings, attract ESG aligned global capital, and strengthen
an initial corpus of Rs 120 million and sustained through adoption. instruments. These structures can transform long gestation nancial resilience. The fundamental transition is from debt
annual contributions equal to one percent of revenues from This creates a direct opportunity for nancial conversion. mining assets into investable nancial products that attract dependent nancing toward an asset backed investment
participating institutions. Its core objective is to expand the Renewable energy cash ows can be structured into green long term capital. driven nancial system.
investor base to 2.5 million and deepen nancial bonds, infrastructure REITs, and climate aligned funds. International experience from Chile and Australia
intermediation in a market that remains structurally Pakistan’s rupee denominated green bond issued in March demonstrates that well-structured resource nance Conclusion
shallow. 2026 by Parwaaz Financial Services Limited represents an frameworks can deepen capital markets, stabilize scal Pakistan’s capital market development will depend on its
Despite recent progress, including 25,114 new investor early institutional step, alongside expanding green sukuk revenues, and mobilize institutional investment at scale. ability to systematically convert real economic assets into
accounts opened in April 2026, capital market penetration instruments. investable nancial instruments at scale. The expansion of
remains below one percent of the population. This re ects a The policy imperative is to convert fragmented energy Investor Access solar energy and the country’s mineral base provide two
persistent gap between the scale of the real economy and investments into standardized nancial instruments that A binding constraint remains extremely low retail structurally powerful foundations for this transformation.
the depth of nancial participation. The central challenge is can deepen capital markets and broaden investor participation. Capital markets are still limited to a narrow The real opportunity lies in building an integrated
investor base, while household savings remain largely
the weak conversion of national savings into formal participation. outside formal nancial channels. investment architecture that connects households,
investment channels. institutions, and global investors to productive national
Mineral Wealth This gap can be addressed by linking nancial instruments assets in a transparent and accessible manner.
Energy Shift to tangible assets in energy and minerals, thereby
Pakistan’s mineral base remains largely disconnected from improving transparency, trust, and perceived value. If supported by the Capital Market Development Fund and
Pakistan’s renewable energy expansion is increasingly its nancial system. The country holds signi cant reserves, consistent policy execution, renewable energy and mineral
functioning as a parallel investment system outside formal including an estimated 6 billion tons of copper ore and 1.5 Pakistan’s mobile ecosystem, with over 190 million based instruments can signi cantly deepen nancial
capital markets. Since 2018, more than 51 gigawatts of solar billion tons of iron ore, along with substantial gold deposits. connections, provides a strong foundation for scaling markets.
capacity have been imported, including around 17 Yet mining contributes only around 3 percent to GDP. This digital investment access and fractional ownership models.
gigawatts in 2024 alone. Installed capacity is now estimated re ects a structural gap between resource endowment and The Capital Market Development Fund can play a catalytic This marks a decisive shift toward a more inclusive, asset
at 32 to 34 gigawatts, largely driven by distributed rooftop nancial market development, where natural wealth is not role through nancial literacy, product innovation, and backed, and investment driven capital market system
systems. adequately translated into investable capital. simpli ed investment pathways. However, sustained capable of supporting long term economic stability,
This represents a structural change where households and Global demand for critical minerals such as copper is rising progress will depend on institutional credibility, regulatory resilience, and growth.
small businesses are directly nancing productive energy sharply due to electric vehicles, renewable energy systems, strength, and investor protection.

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