PSX investment — an alien concept

The financial markets of any country are essential for its economic growth. About one out of 100 people in Bangladesh invests in the stock market, while 4.5 per cent of India’s population is involved in the financial markets. Considering these figures, it seems certain that the proportion of Pakistani investors would fall in the same range. However, the figure is quite dismal, with only 0.1pc of the population or about 250,000 people investing in the market. Among these, the number of active investors remains well below 100,000, compared with India, where the active investor count is above 10 million, followed by Bangladesh, with almost 2m people participating in financial markets. Stock market investment remains an alien concept for the people. The first words that come to the minds of the masses when talking about the market include ‘gamble’, ‘conventional’ and ‘risky’. This owes largely to the malpractices of brokers amid weak controls, resulting in financial losses for investors during the 2008 crisis. Lack of knowledge also remains at the heart of the problem. People don’t even know how to open an account with the broker, let alone make informed investment decisions. Even finance professionals find it cumbersome to get the hang of the fundamental and technical analysis of the shares, which impedes their market participation.