ISLAMABAD: The Asian Development Bank (ADB) has approved a $300 million policy-based loan to help Pakistan strengthen its finance sector by supporting measures to develop competitive capital markets and encouraging private sector investment.
The Asian development bank informed that it has supported the development of Pakistan’s financial markets through three policy-based loans in the last two decades.
“The Third Capital Market Development Programme will increase the “size and capacity of capital markets and support reforms that enhance the institutional and regulatory capacity of relevant government bodies,” the bank added.
The bank believes that the programme will diversify Pakistan’s investor base, develop important market infrastructure such as surveillance systems, and improve the supply of alternative financial instruments.
According to ADB Senior Project Officer Sana Masood, “Capital markets act as a major catalyst in transforming the economy into a more efficient, innovative, and competitive marketplace.”
“The reforms proposed under this programme will lower the cost of financial intermediation and facilitate private sector investment to generate sustainable growth and job opportunities,” it added.
ADB Senior Project Officer further said, “It will also mitigate the negative impact of capital market instability on the economy and help to diversify Pakistan’s financial system.”
Meanwhile, ADB Principal Financial Sector Specialist Syed Ali-Mumtaz Shah said, “Institutional strengthening of the debt management office will develop the government bond market on a sustainable basis.”
“Establishing a special tribunal for capital market-related cases would significantly enhance investor confidence in the equity market,” Syed Ali-Mumtaz added.
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