Abstract:
Purpose: The purpose of this research study is to determine the impact of demutualization on
Karachi Stock Exchange (KSE), Pakistan. This research is completed through the exploration of
prevailing literatures published on demutualization of other regional exchanges.
Methodology: Research methodology includes interviews of respondents from Karachi Stock
Exchange like brokers and financial analysts.
Findings: The outcomes of this research indicate that demutualization is in favor of KSE
(including LSE and ISE). After demutualization there is positive impact on corporate
governance, efficiency in operations, transparency in trading, and liquidity rate in market
through IPOs. In spite of benefits some risk factors are also involved such as political
uncertainty, market fluctuations, and conflicts of interest, etc. After analyzing the impact of
demutualization from regional exchanges perspective (Indian National Stock Exchange and
Hong Kong Stock Exchange) that their circumstances differs from the Pakistan such as their
market stability, political certainty, government policies, etc.
Practical Implications: This research study is helpful to create awareness in the market
especially for the small investors, academics, students, and public.
