Key Takeaways
- Finance Minister Senator Muhammad Aurangzeb directed authorities to accelerate capital market reforms.
- The focus is on developing Pakistan’s corporate debt market to reduce reliance on bank financing.
- A study will cover reforms related to sovereign financing, non-bank financial institutions and primary dealers.
Finance Minister Senator Muhammad Aurangzeb has directed authorities to accelerate capital market reforms in a bid to deepen Pakistan’s corporate debt market. This move aims to diversify financing sources for businesses, particularly small and medium enterprises (SMEs), reducing their reliance on bank financing.
At a meeting of the Capital Market Development Council (CMDC), the finance minister reviewed progress on capital market reforms and highlighted that while Pakistan's equity market has shown encouraging progress, its corporate debt market remains underdeveloped. He emphasized the need to promote market-based funding and create a more balanced financial ecosystem.
The meeting also discussed an ongoing external study on developing Pakistan’s local currency-linked bond market. The study will cover reforms related to sovereign financing, non-bank financial institutions, primary dealers, secondary markets, market infrastructure, hedging and derivatives, and the broader capital market framework. Aurangzeb directed that the study should provide practical, evidence-based recommendations supported by international best practices.
Participants reviewed findings from surveys and stakeholder consultations conducted by the Securities and Exchange Commission of Pakistan (SECP) on challenges faced by top 100 listed companies in accessing the corporate debt market. The finance minister called for broader engagement with medium-sized enterprises and growth-oriented businesses that could benefit from capital market financing.
To strengthen institutional capacity, Aurangzeb directed the SECP and the Pakistan Stock Exchange (PSX) to establish dedicated Debt Desks at senior management level with clear mandates, measurable performance targets, and responsibility for overseeing implementation. He also stressed the need to improve competition among market intermediaries and infrastructure providers to enhance efficiency, service quality, and reduce transaction costs.
The meeting discussed simplifying the corporate debt issuance process through closer coordination among SECP, PSX, and the Central Depository Company (CDC). The finance minister called for a one-window listing framework supported by standardized procedures, digital integration, and simplified corporate debt listing workflows to improve transparency and ease of access.
Participants also discussed measures to expand Pakistan’s Islamic capital market, including the domestic Sukuk market, improving secondary market liquidity, promoting green and sustainable financial instruments, taxation reforms, SME preparedness, financial literacy, and digital investment platforms. Emphasizing implementation, Aurangzeb said future work of the Capital Market Development Council should be organized through thematic working groups with clearly defined responsibilities, timelines, and regular progress reviews.
