Pakistan

Introduction

Pakistan is the 23rd largest economy in the world in purchasing power parity, and the 42nd largest in GDP. The Pakistani economy is semi-industrialized, and has centers of high growth along the Indus River. Pakistan’s service sectors account for ~60% of its GDP; these sectors include telecommunications, transportation, storage, finance, and insurance.


Pakistan Stock Exchange (PSX)

The Pakistan Stock Exchange (PSX) is a stock exchange with floors in Islamabad, Karachi, and Lahore. It was established in January 2016 after the merger of the Islamabad, Karachi, and Lahore Stock Exchanges; and as of July 2020, there are ~540 companies listed on the PSX, with a market capitalization of around $43B. Some of the largest companies by market capitalization listed on the PSX include the Oil & Gas Development Company (OGDC), Pakistan Tobacco Company (PAKT), Nestle Pakistan (NESTLE), Pakistan Petroleum (PPL), and MCB Bank (MCB). 


The PSX has made significant strides over the past few years, and is a major institution in the country that is contributing to capital formation. The PSX is overseen by the Securities and Exchange Commission of Pakistan (SECP). The SECP also regulates the insurance industry and credit rating agencies in Pakistan. 


Stock Indices

The KSE 100 Index is a stock index used as a benchmark to track the performance of the Pakistan Stock Exchange. The KSE is a market cap-weighted index of 100 companies - which represent ~90% of the total market capitalization of the PSX. The main sectors included in the KSE 100 are power generation & distribution, oil & gas, commercial banks, and technology. Some of the companies included in the KSE 100 are Abbott Laboratories, Askari Bank Limited, Indus Motor Company, Nestle, and Pioneer Cement. 

Other stock indices include KSE 30 & KMI 30.


Trading Hours

All listed times are in Pakistan Standard Time (+05:00). The trading session from Monday to Thursday is from 9:30AM-3:30PM. The trading hours differ on Friday: the first trading session is from 9:15AM-12:00PM, and the second trading session is from 2:30PM-4:30PM. 


If I live in Pakistan, how can I invest in the U.S.?

If you’re interested in investing in the U.S. markets, opening an account with a U.S.-based broker that is supported in your country may be a suitable option. Examples of brokers that are supported in Pakistan are Interactive Brokers and Lightspeed. The below provides a quick overview of both examples, note the below is subject to change so please do your due diligence and check with the respective broker before making any investment or monetary decisions.


Finally, How Can I Invest in Pakistan?

Avenue 1: Open an account with a Pakistani Broker 

If you are a Pakistani national & live in Pakistan, you must have a funded bank account and national identification documents to open a brokerage account. You can open a broker account online by providing proper identification documents and proof of residence. 

If you’re a non-resident Pakistani national (NRP) or non-resident foreign national (NRF), you’ll be required to open an account with a Pakistani bank that offers custodial services. Moreover, you’ll be required to open a depository account with the Central Depository Company and the State Bank of Pakistan in order to hold securities & government bonds. Once you’ve completed these steps, you can then open an account with a registered Pakistani stockbroker. 


Avenue 2: Open an Account with an International Broker 

Interactive Brokers, a U.S.-based brokerage firm, is supported in Pakistan  - and allows individuals to trade Pakistani stocks, indices, stock options, and futures. 


Avenue 3: Invest in ETFs & mutual funds with Pakistani exposure

There are a number of exchange-traded funds and mutual funds that offer exposure to Pakistani stocks:

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