The paradox of PSX

How does the stock market grow when participants exit and defy fundamental economic principles? In essence, the stock market operates similarly to a casino — individuals cannot guarantee a win but continue to place their hopes on it, holding out for that one elusive jackpot. News headlines frequently announce that the KSE 100 index has crossed thresholds with significant increases. While, over the past decade, 170 companies have delisted from the Pakistan Stock Exchange (PSX), only 67 new companies have joined. The sectors most affected by delisting include textile spinning (17 firms), textile composite (10 firms), exchange-traded funds (eight firms), and investment banks (seven firms). In financial literature, firms list their shares as a strategic measure to enhance their bargaining power with financial institutions, reduce reliance on debt financing, and increase their visibility and reputation.