Pakistan, Malaysia join forces to strengthen islamic capital markets

A delegation of Malaysian Shariah scholars and professionals visited the Pakistan Stock Exchange (PSX) to promote greater cooperation between Malaysia and Pakistan in the field of Islamic finance. The visit was marked by a gong ceremony to honor the delegation, followed by discussions on advancing cross-border collaboration and fostering the growth of Shariah-compliant capital markets.

PSX Chairperson Dr Shamshad Akhtar expressed optimism about expanding the relationship between the two countries’ Islamic finance sectors, noting that Pakistan is seeing increasing demand for Shariah-compliant investment options. 

She emphasized the PSX’s role in offering a diverse range of faith-based investment opportunities, including equities, Sukuk, Islamic mutual funds, and exchange-traded funds (ETFs), with over 50% of the listed companies being Shariah-compliant.

Pakistan’s achievements in Islamic finance were highlighted by the Securities and Exchange Commission of Pakistan’s (SECP) Head of Islamic Finance, Tariq Naseem, who briefed the delegation on the advancements in the sector, including regulatory reforms and the rise of Islamic financial services catering to both local and international investors. He also discussed the future potential for collaboration between Pakistan and Malaysia in promoting Islamic finance globally.

PSX Managing Director and CEO Farrukh H Sabzwari expressed his intent to leverage Malaysia’s expertise in Islamic finance to further develop Pakistan’s capital markets. 

He pointed out the untapped potential in Pakistan’s investor base, with only 0.14% of the population currently participating in the capital market, compared to 1% in Bangladesh. 

Sabzwari also shared updates on the PSX’s progress in digitizing market processes to encourage greater investor engagement.

The event was also attended by key stakeholders from the capital market, including Badiuddin Akber, CEO of Central Depository Company, Imran Ahmed Khan, Deputy CEO of National Clearing Company, and Farrukh Ansari, Chairman of Pakistan Mercantile Exchange, who spoke about their institutions’ contributions to the market’s growth.