Pakistan's stock market will double, but the onboarding is broken

The setup: a market that has tripled, an audience that has not arrived

The episode opens with Muzamil framing the conversation inside the ongoing Endeavor Pakistan series — the search for the country’s fifty most exciting businesses — and arguing that you cannot have that conversation without talking about the stock market. His starting frustration is simple: Pakistan has one of the lowest savings-to-GDP and investment-to-GDP ratios in the region, founders complain constantly that capital is unavailable, and the one regulated avenue for ordinary Pakistanis to put their money into productive businesses is the place almost no one goes.

Ali Farid Khwaja, returning to the show for the second time, corrects one small thing first — he is chairman of KTrade, not CEO; his co-founder Mahmood Bukhari runs the company day-to-day — and then walks Muzamil through what has actually changed since they last spoke. KTrade’s daily traded volume is now five to six million dollars, against a Pakistan Stock Exchange daily volume of around a hundred million. Half of that flow comes from institutional investors — local banks, asset managers, insurance companies, and through KTrade’s partnership with Jefferies, global names. “When BlackRock, Templeton, Schroders, Ashmore invest in Pakistan,” Ali says, “we are one of the brokers which execute those trades.” The other half comes from retail: five to six thousand people use the KTrade app every day, a number that is up ten-fold over three years.

The market itself is doing what almost no other market in the world is doing. Pakistan was the second-best-performing equity market last year at 74%. This year it is up another 50%. And Ali’s call is unambiguous: “We are in the middle of the cycle of the bull run. I think the market will double from here over the next two years.”

Why only 0.2% of Pakistan invests

Muzamil presses the obvious question. If the returns are this good, where are the people? Three years ago the number of direct retail investors stood at around 250,000. Today it has roughly doubled to 400,000. Doubling sounds like growth until you sit it next to the comparators Ali offers: India is at 14–15% of the population, the UK at 24%, the United States at 50%, Saudi Arabia at something close to a third of its citizens. Pakistan is at 0.2%.

Muzamil’s framing of the puzzle is sharp. It is not that Pakistanis are risk-averse. The same people who refuse to open a brokerage account are pouring money into Forex platforms, unregulated crypto schemes and meme coins. “People are not afraid of risk,” Ali agrees. “They are buying meme coins, they are going to Forex platforms. So it’s a shame, and it’s unfortunate.”

The real reason, in his telling, is the customer journey. “Money flows in the path of least resistance, like water,” he says. “If one door is blocked or is difficult to get in, the guy that will flow somewhere else.” Seven years ago you could not open a brokerage account digitally at all — you had to sign forty pieces of paper and give a biometric on a device only available at a broker’s office between nine and five. Digital onboarding was eventually allowed, partly through Ali’s own consulting work with the Asian Development Bank on financial-market reforms, but the regulator inserted a third party in the middle. Brokers cannot directly query NADRA’s Verisys system the way banks, JazzCash and EasyPaisa do. Instead, a separate body called CKO — sitting under the National Clearing Company — handles identity verification at its own pace, then sends the customer an OTP, which the customer must then enter into NCCPL’s own app, which then notifies the broker. “This process can take one week,” Ali says. He hears the complaints daily.

The bureaucracy is trained on debt

Later in the discussion, Muzamil widens the lens. If the problem is known, why has it not been fixed? Ali offers three layers of explanation, and the third is the most interesting.

The first is informational. Most Pakistanis do not invest in stocks, so they have not encountered the friction, so they do not lobby to remove it. The second is administrative. The regulator is not hostile — SECP and Pakistan Stock Exchange both know the problem and want to fix it — but the senior layers of government are buried in committee meetings, and digital literacy at the policy level is genuinely thin. “Government of Pakistan officials still use Gmail, use Hotmail,” Ali notes. “They don’t even have a singular secure email system of their own. So that’s the state we are talking about.”

The third is the one Muzamil leans into. Pakistan’s bureaucracy, Ali argues, has been trained on debt, not equity. The government raises debt. The banks deal in debt. Finance ministers are recruited from banks or the IMF, where debt is the native instrument. “Pakistan, until now, has under-appreciated capital formation,” he says. The result is a country that calls itself Islamic but operates almost entirely on interest-bearing borrowing at every level — and that defaults to IMF programmes instead of building the equity markets that would let entrepreneurs raise risk capital. Muzamil pushes the comparison further by pointing out the asymmetry with crypto: the same government that cannot find the bandwidth to fix brokerage onboarding has been “extremely enthusiastic, extremely energetic, extremely positive” about crypto, despite crypto creating almost no jobs and no real economic activity inside Pakistan.

Saudi Arabia as the contrast case

The conversation turns to KTrade’s expansion into Saudi Arabia, and Ali uses the comparison as a mirror. Saudi’s Tadawul exchange has a daily volume of around two billion dollars — twenty times Pakistan’s — and around seven million retail investors. Saudi’s market is not delivering Pakistan’s returns; it was down last year and is down this year. But its infrastructure for new listings, retail participation, and trading activity is functioning at a different order of magnitude.

Why? Vision 2030, Ali says, is not a slogan. “It’s not like Pakistani plans. It’s very specific. They have annual targets, targets for each area. Their targets explicitly say: we have to do this many IPOs, this much trading activity, this many investors.” When KTrade arrived in Riyadh, the seniority of the people who welcomed them was almost embarrassing — the CEO of the stock exchange, senior officials, all making time for what was, by Saudi standards, a small foreign company. “Versus here you come to do business and they ask, why are you doing this? What is your personal interest? What is your agenda?” Muzamil agrees: in Pakistan, anyone interacting with a system is guilty until proven innocent.

Why founders won’t list — and what listing actually does

A long stretch of the conversation deals with the supply side of the IPO market. KTrade has run five IPOs in the last twelve months — every one of them oversubscribed, several by six times — including Big Bird (a chicken supplier to KFC), an egg exporter, a med-tech company, and the secondary raise for Organic Meat, Pakistan’s largest meat exporter. Pharmaceutical and oil companies are next. By the standards of Pakistan’s market this is encouraging. By the standards of Saudi Arabia’s twenty-five IPOs a year, or India’s volume, it is small.

Muzamil presses on a specific category: consumer-facing growth companies. He uses Cheezious as his example — thirty branches, GT Road dominance, a Gen Z fanbase, the kind of brand a Pakistani investor would actually want to own a share of. Why are these companies not listing? Ali’s answer is honest. KTrade goes to companies like this constantly. He has personally pitched Pakwheels — “Imagine if all your fans who follow your cars buy your shares and become shareholders in your growth” — and has not succeeded. Founders give three kinds of reasons. Some do not want to share ownership. Some have access to bank debt and prefer it. Some are running profitable businesses and do not want a boss, a board or public accountability. “Mera koi boss nahin hai. Main kisi ko accountable nahin hoon. Main khush hoon.” Ali’s view is that this is not optimal. It caps the ceiling. India runs a hundred-thousand-person companies; Pakistan stays at two hundred and fifty.

Muzamil then surfaces the regulatory wall that makes this even harder for the country’s most credible growth stories — its tech startups. SECP’s rules require that a company listing on PSX be a Pakistani entity. But virtually every serious Pakistani startup is structured with a holdco in Singapore, the UK or Dubai. The Singapore holdco cannot list in Karachi. The workaround — listing the Pakistan opco for, say, 20% while the holdco retains 80% — is legally possible, and KTrade is in active conversations with several large startups about exactly this structure. But Ali says the same blocker keeps appearing: international investors at the holdco level tell founders not to do it. “They say: don’t do it. Holdco should own 100%. Raise money at the holdco level. Find international investors there.”

The free corporate-finance offer

The most concrete piece of advice in the conversation comes when Muzamil, unprompted, makes a “shameless plug” on Ali’s behalf. Any Pakistani company doing one, two, or three million dollars of revenue or more, he says, should pick up the phone to KTrade — not necessarily to IPO tomorrow, but to get the foundational structures right for whatever raise comes next, VC or public.

Ali confirms it and goes further. KTrade’s corporate-finance team, headed by Umair Saleh — who Ali says has taken more Pakistani companies public than almost anyone in his cohort — does this work pro bono. The fee only kicks in when a transaction actually closes, whether that is an IPO, a private placement, or a debt raise. He mentions a real-estate company KTrade is currently raising a bond for, and the IT-services health-care AI company they are taking through an IPO process. The pitch he is making to founders is simple: take the call, get the benchmarks, decide later.

The cycle Pakistan has lived twenty-five times

By the end of the conversation, Muzamil pushes Ali toward the macro picture. He wants to know whether the current stability is sustainable, where the risks sit, and whether Pakistan is once again about to celebrate a stability narrative and then quietly cap the dollar, pump real estate, and walk into the next crisis.

Ali does not flinch from the cyclical reading. Pakistan, he says, runs a boom-bust cycle every five years and the pattern is so well-set “we should not be surprised, and I am surprised that people are surprised.” The cycle begins in crisis: reserves gone, inflation high, current account in deficit. Pakistan goes to the IMF, accepts the discipline package — interest rates up, economic activity throttled, imports compressed. Reserves rebuild. Credit ratings improve. Rates come down. The stock market starts going up. Growth returns. Imports rise again. And then the temptation hits: real estate gets cheap money, the dollar gets propped up, and the country tells itself that this time foreign investment will save it. “Hum pachees dafa dekh chuke hain apni Pakistan ki history mein, aur pachees dafa IMF ke paas ja chuke hain.”

Muzamil presses on the dollar specifically. Stability in the rupee always makes him nervous, because historically a 7–8% drift is the honest number and either you let it happen gradually or it bursts. Ali is sympathetic but ultimately bullish on the immediate cycle. The geopolitical position, he argues, is genuinely better than it has been since 2004–2008: the army chief in Washington, the prime minister in Beijing, engagement with Japan, Turkey, Saudi Arabia, and a President Trump whose tweets about Pakistan have been unusually warm. The opportunity is real. The risk, he is honest about, is on the Pakistani side. Saudi investment commitments from the previous cycle — the Karachi Electric deal among them — were never closed because of administrative and bureaucratic issues Pakistan failed to resolve. “The intent from the Saudi side was real. We have not been able to do the reforms.”

His prescription is unfashionably ordinary. The government does not need to perform miracles. It needs KPIs that are not rolling, accountability that does not mean NAB, and the discipline to ask why each previous commitment fell through before announcing the next one. “Ek din hum kehte hain Saudi invest karega. Doosre din hum kehte hain crypto ki wajah se America invest karega. Phir hum kehte hain nahin China invest karega. Aur phir woh cycle return ho jata hai.”

What the conversation actually adds up to

Muzamil closes by surfacing the through-line. The ingredients for retail participation are now in place: a finance-media layer that did not exist three years ago, rising knowledge among ordinary investors, and consumer interest that is plainly being soaked up by less regulated venues. The regulatory wall is the last brittle piece. Move 400,000 investors to four million, then to forty million, and Pakistan finally has the capital-formation engine its bureaucrats have spent decades substituting debt for. Muzamil’s other observation — the one Ali endorses without hesitation — is that founders themselves need financial education. Most of the operators he speaks to do not understand how important their financial foundations are to any future raise, public or private. KTrade, he argues, should be running explicit programming on exactly this.

Ali closes by inviting listeners to download the KTrade app, register at ksbl.com, and live through the painful onboarding anyway. “I have already told you why it’s painful. It’s because of regulatory reasons. But once you have opened your account, it will be easier to invest.” For founders, he points to LinkedIn — his own and his team’s — and to KTrade’s involvement with PSEB, Ignite and Pak Launch as the practical channels. “If they grow then Pakistan’s economy will grow and KTrade will grow. We don’t have any other job. If you win, we win.”