ROLE OF KARACHI STOCK EXCHANGE IN ESTABLISHMENT OF DEMUTUALIZATION PROCESS IN PAKISTAN

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.