Dynamics That Constrain Investment in Pakistan’s Stock Exchange

Abstract

In Pakistan's financial sector, a variety of factors, including intuition, anxiety about risk, investments, corporations, and daily experience, have a substantial effect on investors' decision-making. The purpose of the study is to increase investor confidence and equity investing awareness among a broad spectrum of investors. In this article, the institutional, legal, and political barriers to investment in Pakistan are examined. It talks about the practical challenges investors encounter, such as dispute resolution, legislative lobbying, and retention tactics. Additionally, taken into account are elements like the informal economy, shallow financial markets, and low savings rates. The study also addresses the administrative shortcomings in tax collection, which impede investment and growth. It highlights the significance of SME growth and the difficulties of expanding operations in Pakistan. This article also covers current policy changes that aim at enhancing the investment environment through the introduction of certain novelties through the introduction of capital strategies and skill-building programs into practice. The key objective of this article is to show that the Securities and Exchange Commission of Pakistan's effectiveness in regulating securities markets for investor protection needs to be improved to protect investors from fictitious, abusive, or fraudulent transactions such as confidential trading, competitiveness, or trading ahead of customers, and customer asset misappropriation. During this research, an analytical approach along with descriptive methodology will be applied. The current laws and regulations on Effectiveness in Regulating Securities Markets for investor protection of SECP will be analyzed critically and this paper includes systemization.