ISLAMABAD
\nThe Asian Development Bank (ADB) has approved a $300 million loan to further develop Pakistan\u2019s capital markets, promote private investment in the country, and help mobilise domestic resources to finance sustainable growth.
\nIn a statement issued on Tuesday, the Manila-based lender said the second sub-programme of ADB\u2019s Third Capital Market Development Programme builds on institutional and regulatory reforms put in place under the first sub-programme approved in 2020. It aims to catalyse institutional investor demand and increase the range of alternative financial instruments such as derivatives and commodity futures that are available to investors.
\nADB Director General for Central and West Asia Yevgeniy Zhukov said that for several years, ADB has been Pakistan\u2019s lead development partner in supporting the evolution of its capital markets.
\nBy making the country\u2019s capital markets more robust and strengthening government debt management, this new programme will also help mobilise more domestic resources which support the government\u2019s efforts to finance sustainable growth and respond effectively to crises, he added.
\nPakistan\u2019s finance sector is dominated by banks and this lack of diversification increases the risk of the country not being able to withstand financial shocks and periods of uncertainty. Moreover, the Pakistan Stock Exchange (PSX) lacks depth in terms of the number of investors which access it and the number of companies raising capital, while Pakistan\u2019s bond market is almost completely dominated by government borrowing, said the statement.
\nAccording to the statement, the ADB\u2019s programme supports policy actions that will strengthen market stability and attract investor capital to Pakistan. These include structural reforms within the Securities and Exchange Commission of Pakistan (SECP) that will improve governance and regulatory capacity.
\nIt supports measures that will strengthen the government debt market and enhance market surveillance systems that facilitate information exchange. The programme also promotes an enabling environment to expedite access to financing for growth companies and state-owned enterprises, the statement said.
\n\u201cThese reforms will help mobilise financial resources for productive investment, especially by the private sector, and help facilitate economic growth by developing the bond and equity capital markets,\u201d said ADB Economist Sana Masood. This will help reduce the cost of financial intermediation and help stabilise systemic vulnerabilities in the bank-dominated finance system, she added.<\/p>\n","protected":false},"excerpt":{"rendered":"
ISLAMABAD The Asian Development Bank (ADB) has approved a $300 million loan to further develop Pakistan\u2019s capital markets, promote private investment in the country, and help mobilise domestic resources to finance sustainable growth. In a statement issued on Tuesday, the Manila-based lender said the second sub-programme of ADB\u2019s Third Capital Market Development Programme builds on […]<\/p>\n","protected":false},"author":2,"featured_media":228072,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[997,5239,385,5238],"class_list":{"0":"post-250810","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-adb","9":"tag-capital-markets","11":"tag-sustainable-growth"},"yoast_head":"\n