Capital markets key as Pakistan bets on domestic funding: Aurangzeb

Finance Minister Muhammad Aurangzeb said the country has sufficient internal resources to support investment and growth, stressing that local investors will play a central role in financing key sectors as capital markets are strengthened to unlock long-term funding.

Addressing the Capital Market Development Fund (CMDF) Signing Ceremony organised by the SECP at the SECP Office in Islamabad, the finance minister said that Pakistan’s mediation efforts continue to go from strength to strength.

“We have seen one positive development overnight, and we are hopeful that the conflict will end at the earliest. It’s the right thing for the world, our region, and our country.”

The minister was of the view that if we have the resources available domestically—in terms of rescue, relief, reconstruction, and rehabilitation—then we do not need to rely on any other country or multilateral institution. “That is the strength we are referring to when we talk about ‘Pakistan First’,” he said.

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He said that the government is increasingly focused on indigenous capital—mobilising domestic resources to meet the country’s needs as part of national security. In that context, capital markets will play a very important role, said Aurangzeb.

He said that the government is often accused of crowding out the private sector, so we must expand into Sukuks and capital markets.

On the equity side, Auranzgeb noted that despite recent volatility—primarily due to geopolitical conflict over the past four to six weeks—the underlying fundamentals remain strong.

Over 220,000 new investors have entered the market in the past two years, largely led by youth through technology and digital access.

“In April alone, around 24,000 new investors joined the market, the highest ever in a single month. So from the equity stand, we are indeed moving in the right direction.”

“However, in the debt capital market, we have actually gone in reverse gear,” he said.

Aurangzeb said that we need to focus on developing the corporate bond market and improving regulations, ease of doing business, and taxation frameworks in collaboration with the Ministry of Finance and the FBR.

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On investor education, Aurangzeb said programs must be sharply targeted at the type of investors entering the market today—primarily the youth, not older generations.

Regulators like the SECP have a crucial role to play in balancing market expansion with investor protection and fiscal prudence.

On privatisation, Aurangzeb said that significant progress is being made on this front. The example of PIA shows that substantial domestic capital exists. “We received collective bids of around $1.2 billion, demonstrating the capacity of local investors.”

While we want to welcome foreign investment, domestic resources are also strong and capable of driving growth, he maintained.

Further privatisation initiatives, including in the power distribution sector and financial institutions, are in the pipeline, shared Aurangzeb. Whereas, public-private partnerships are also being streamlined.

“All of this makes capital markets even more critical going forward,” he said.