PSX, Malaysia to boost Islamic finance
A gong ceremony was held to welcome the foreign guests. Speaking on the occasion, PSX Chairperson Dr Shamshad Akhtar expressed hope for greater collaboration between the Islamic finance sectors of Malaysia and Pakistan, adding that Pakistan was also witnessing a growing demand for Shariah-compliant investment avenues.
With over 50% of listed companies on the exchange being Shariah-compliant, the PSX offers a compelling platform for faith-based investments, including equities, Sukuk, Islamic mutual funds and exchange-traded funds (ETFs).
Since launching its first Ijarah-based Sukuk in 2008, Pakistan has issued Ijarah Sukuk worth over Rs6.5 trillion by August 2024. The continued expansion of Islamic finance institutions, diversified asset classes and investor-friendly regulatory frameworks are contributing to the sector's momentum.
Securities and Exchange Commission of Pakistan (SECP) Head of Islamic Finance Tariq Naseem provided an in-depth briefing to the delegation on the progress and advancements in Islamic finance within Pakistan's capital markets and non-bank financial sectors. He highlighted the significant accomplishments in regulatory reforms and the developments in the Islamic financial services industry to cater to both local and international market needs.
The discussion also covered the potential for enhanced collaboration between Malaysia and Pakistan in promoting Islamic finance on a global platform.
PSX Managing Director and CEO Farrukh H Sabzwari expressed his aspiration to benefit from Malaysia's expertise in Islamic finance for the advancement of Pakistan's capital market.
He pointed out that only 0.14% of Pakistan's population constituted the investor base in the capital market, compared to 1% in Bangladesh, underscoring the significant potential for growth. He noted that the regulators had recently been working diligently to digitise market processes, thereby creating increased opportunities for investor participation.
Sabzwari provided an overview of Pakistan's economy and the PSX operations, during which he revealed that approximately 80% of daily transactions at PSX were Shariah-compliant.
Key stakeholders of the capital market – Badiuddin Akber, CEO of Central Depository Company, Imran Ahmed Khan, Deputy CEO of National Clearing Company and Farrukh Ansari, Chairman of Pakistan Mercantile Exchange – also addressed the gathering, highlighting the essential roles their institutions played in the overall ecosystem.
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